Third and State

The Pennsylvania Budget and Policy Center said another bittersweet good-bye this week, to long-time research director Mike Wood. We will miss Mike’s unflappable demeanor, formidable work output and sly wit. But we are proud to make another excellent contribution to the new administration. Mike joins former PBPC director Sharon Wood in the Governor’s Budget Office. His new title is Executive Budget Manager – Division of Education (we’re saluting as we write that). Congratulations and best of luck, Mike!

PBPC Research Director Mike Wood on Budget Night 2015

PBPC is advertising for a new director, and budget and tax analyst. Read the announcements (and apply or forward to someone you know who should) here.

Just the fact sheets, ma’am … PBPC released a valuable new tool this week that shows how Gov. Wolf’s budget proposal would impact each legislative district. Easy-to-read, one-page fact sheets reveal the property tax relief for homeowners, increased funding for local schools, additional preschool slots created, number of local workers who would benefit by a minimum wage increase and other important information for each district. These fact sheets provide local numbers not found anywhere else. See how your legislative district would fare here.

Testifying on tax proposals … Keystone Research Center Executive Director Steve Herzenberg testified before a Senate Finance Committee public hearing on Wednesday on proposals to increase Pennsylvania’s personal income and sales taxes. Steve told the committee, “together with his severance tax proposal, the Governor’s sales and income tax proposals would provide revenue to reinvest in education, in communities, and in job creation. These investments would reverse the cuts and austerity within the 2011‐12 budget, which contributed to the layoff of 27,000 public school employees and help explain the states low‐job growth ranking. The Governor’s proposal would also solve the state’s structural budget deficit, not only this year but going forward, reassuring bond rating agencies”. You can read Steve’s full testimony here.

Signing on to raise the wage … KRC labor economist Mark Price and KRC/PBPC summer interns Anna Berch-Norton, Ellis Wazeter and Patrice McKenzie joined other members of the Raise the Wage PA coalition in the Capitol on Monday to submit more than 10,000 petition signatures calling on the state legislature to raise Pennsylvania’s minimum wage to at least $10.10 per hour. 

Gov. Wolf accepts minimum wage petition signatures

For more on why the minimum wage should be raised, check out Franklin and Marshall Economics Professor Sean Flaherty’s op-ed today on Pennlive.com.

Soaring production and sliding impact fees … As if we needed further proof that it’s time for Pennsylvania to join every other major gas-producing state and enact a severance tax, PBPC consultant Jan Jarrett blogged this week on Third and State about how gas drillers last year exceeded their production record from the year before by 30 percent, yet their impact fee payments dropped slightly.  “That drop proves that the impact fee does not generate increasing revenues for Pennsylvania as the drilling industry’s production and profits climb. “A severance tax on production, like the one proposed by Gov. Wolf, would generate increasing revenue as production increases and gas prices rise,” Jan writes.

You can read more about the severance-tax-versus-impact-fee debate in a June 10th WESA 90.5 story that quotes PBPC’s Mike Wood on the gas industry’s many excuses over the years.

Smokin’ mad about cigarette tax loophole in Allentown … Mike was also quoted in a June 6^th Morning Call story about a lucrative loophole in Allentown’s one-of-a-kind Neighborhood Improvement Zone that allows developers to use taxes on cigarettes stamped in the zone, but sold across the state, in addition to other state and local tax dollars, to help finance their projects in the city.

Mike called it “a legal shell game providing a cash machine for developers.”

Artist’s rendering of proposed Waterfront riverside district that could be developed with help of cigarette tax
                                                                                         from The Morning Call

Exceeding estimates but lowering expectations … And in his last revenue report for PBPC Mike notes that while General Fund revenues exceeded estimate once again in May that’s likely to be of little help to the 2015-16 budget. Read his blog post on Third and State to find out why.