Gov. Wolf’s new budget expected to seek raise in minimum wage rate

HARRISBURG — When he presents his annual fiscal wish list to a joint session of the Republican-controlled Legislature, Gov. Tom Wolf is expected to stay away from earlier controversial proposals to increase the personal income tax and sales tax in order to reduce property taxes.

As he gears up for his re-election campaign, Mr. Wolf on Tuesday will unveil the fourth and last state budget of his first term, hoping to avoid the partisan fighting that has doomed some of his proposals and led to chronically late budget passage.

His nearly $33 billion plan, according to sources familiar

with it, again will push for savings through consolidating certain agencies. The Democratic governor, however, is likely to advocate a boost in the minimum wage and a new tax on natural gas drillers, two proposals popular with his party’s base that have gone nowhere after fierce resistance from many GOP lawmakers.

Still, the incentive to show leadership this year is high for both sides in the annual tug-of-war.

It’s not just Mr. Wolf whose name will be on the ballot in November. All 203 House seats are up for grabs, as are half the 50 seats in the Senate. Many of those races could be hotly contested, as Democrats try to chip away at the GOP’s dominance in both chambers.

And several legislators who are deeply involved in budget negotiations, including House Speaker Mike Turzai, R-Bradford Woods, and House Majority Leader Dave Reed, R-Indiana, are seeking higher office. Mr. Turzai is gunning for Mr. Wolf’s job, and Mr. Reed is running for Congress.

“I wouldn’t look for anything overly provocative,” said political pollster and analyst G. Terry Madonna of Franklin & Marshall College. “This will be a re-election budget.”

Mr. Wolf has kept details of his plan close to the vest but late last week announced that he will again propose boosting funding for education, a staple of his budgets. He would increase funding for public schools by $100 million; early childhood education by $40 million; special education by $20 million; and the State System universities by $15 million.

He is also expected to announce a $50 million job training initiative, called PASmart, to enhance STEM — science, technology, engineering and mathematics — and computer-science skills and apprenticeships.

On the opposite side of the ledger, Mr. Wolf will benefit from a somewhat brighter revenue picture. According to the state’s Independent Fiscal Office, revenue estimates are holding up well, meaning the state is not heading into the new fiscal year with the gaping deficits of recent years.

The IFO in November projected a $600 million deficit in the next fiscal year, if the state does not spend more on discretionary programs or adopt any new revenue-generating policies — a figure more than two times smaller than last year’s projection.

A projection that federal tax changes will lead to higher consumer confidence as well as strong revenues from the state’s expansion of gambling have helped fuel the upswing.

“Things are definitely better and stronger than they were this time last year,” said Matthew Knittel, the IFO’s director.

Still, Mr. Wolf is expected to hark back to past proposals to raise new dollars and save money.

For instance, he is expected to again push for a volume-based tax on natural gas drilling in the Marcellus Shale. The governor is also expected to propose consolidating the Department of Health and the Department of Human Services and renew his call for municipalities without their own fulltime police force to pay a perperson fee for state police coverage.

Despite the work ahead, there has been little pre-budget buzz. Part of that, longtime political observers said, is pure budget fatigue: The past three years have been dominated by wrangling over the state’s finances, with the budget getting resolved weeks or months after the July 1 deadline.

The current $32 billion budget, for instance, wasn’t resolved until October. Mr. Wolf’s first year in office was marked by a historic impasse that dragged on for nine months.

“We’re hoping to see just a more reasonable proposal that, hopefully, Republicans and Democrats can work together on and get done in a timely fashion,” Mr. Reed said Monday. For Republicans, he said, that would mean no new taxes and reduced spending.