A DOA budget & ‘leadership’ questions
The bad news is that Gov. Tom Wolf’s proposed budget for the coming fiscal year represents a perfect example of “progressive” ignorance of sound and fundamental economics.
The good news is that the tax-and-spend blueprint is dead on arrival, standing about as much chance of passing the state Legislature as city streets in Pittsburgh stand to be plowed in a timely fashion after a snowstorm.
The centerpiece for the governor’s $40 billion spending plan is a hefty hike in the state’s personal income tax rate, from 3.07 percent to 4.49 percent.
And while the Wolf administration, in true Orwellian fashion, bills it as “a plan to cut taxes for working-class families,” it sticks it, deeply, into the back of the Keystone State economy.
Indeed, some rationalizing observers are calling the tax hike a “tax shift” to force “the rich” to pay more of their “progressive taxation fair share.”
But this shift more resembles a shaft – a shaft to more than three-quarters of million Pennsylvania small businesses that pay the personal income tax. They could see their taxes rise by more than 45 percent in some cases.
It’s a business and jobs killer. And that’s an economy killer.
These are among the same businesses deemed “nonessential” in the early days of the coronavirus pandemic by a state using either willy-nilly or no valid criteria to shut them down.
These are among the same businesses labeled as “cowards” by Wolf for having the audacity to defy the cudgel of “The State” to feed themselves, their families and their employees.
Those arbitrary and capricious acts of government represented a metaphorical internment. Starving, untold numbers of Pennsylvania businesses could not survive.
Now, untold numbers more, already tortured by irrational and illogical government action, face the metaphorical firing squad of a massive tax increase that surely will execute their very livelihoods.
This is just one aspect of a budget plan that defies logic and defiles good governance. And it all comes in the continuing climate of a worldwide pandemic that is showing few signs of abating.
Who in their right mind would propose raising taxes in such an environment?
And as Lowman Henry of the Lincoln Institute reminds, Pennsylvania’s budget “suffered from a massive structural deficit even before the pandemic dramatically impacted state revenue.”
Lawmakers used federal dollars last November to “paper over” the state budget deficit, Henry reminds, adding that balancing the 2021-22 budget will be “next to impossible.”
“A prudent course of action would have been to rein in spending,” Henry says. “Not only has that not happened, but the governor has again overspent his legislatively-authorized budget leaving the General Assembly with an even more insurmountable deficit headed into the new fiscal year.
“Worse, Wolf continues to call for new and increased spending and is enthusiastic in proposing additional ways to scoop up taxpayer dollars.”
Thus, post-pandemic economic recovery that the commonwealth’s Independent Fiscal Office predicted could take six years likely will be retarded – or canceled altogether.
The Pennsylvania Manufacturers’ Association (PMA) calls the Wolf budget “indifferent to the reality of struggling Pennsylvanians.”
“Wolf has offered up an obscene progressive wish list that disrespects the economic reality of families and small businesses trying to make it through the month,” the association says.
Again, the Wolf budget stands no chance of Legislative approval. But that the governor would propose such a recipe for permanent economic disaster – what kind of “public policy” is that? — calls into question his very competency as a “leader.”
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (firstname.lastname@example.org).