Highlights of Governor Tom Wolf’s 2022-23 budget plan | Pennsylvania News

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Highlights of Democratic Gov. Tom Wolf’s spending plan for Pennsylvania’s 2022-23 fiscal year that begins July 1:

— Increases spending through the state’s main bank account to $43.7 billion, about 13% of this year’s enacted budget of $38.6 billion. Including $3.5 billion in federal pandemic assistance, spending on state operations is projected to be $41 billion this fiscal year.

— Forecasts a surplus of $6.4 billion at the end of this fiscal year, but uses about $3 billion to support expenditures in 2022-2023. Leave intact $2.9 billion which is held separately in a Restricted Fiscal Reserve Account.

— Projects a 2% drop in tax revenues to $41.9 billion as the economy slows. Does not increase the tax rate on income or sales, the two main sources of state revenue.

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– Calls on lawmakers to raise the state minimum wage to $12 an hour on July 1, from the federal minimum of $7.25 an hour, with annual increases of 50 cents until minimum wage reaches $15 on July 1, 2028. Wolf’s proposed increase includes tipped workers.

— CORPORATE INCOME TAX: Reduces the current 9.99% corporate income tax rate to 7.99% in 2023, 6.99% in 2026 and 5.99% in 2027. The change is expected to cut revenue by $79 million in 2022-23, but would be accompanied by new “tax base modernizing” rules to help ensure that large corporations don’t shift profits out of state to low-income jurisdictions. tax rate.

— Request about $1.8 billion more for teaching, operation and special education in public schools, or about 21% more. Of this amount, $300 million is earmarked for the 100 poorest public school districts and $200 million is earmarked for special education.

– Seeking $200 million a year to fund scholarships for students at a university in the state’s higher education system if they stay in Pennsylvania for as long as they qualify. Scholarship money would be targeted to high-demand study programs. Of the $200 million, $88 million would come from a slot gaming tax that subsidizes the state’s horse racing industry and $112 million for each of the first two years would come from the money from the US Federal Bailout Act approved by Congress last March.

– Establishes a statewide cyber charter school tuition rate of $9,800 per student, which would save school districts $199 million per year and changes the reimbursements of the special education for charter schools to save school districts an additional $174 million annually.

– Seeks about $800 million to increase reimbursement rates for direct care workers under Medicaid who care for people with disabilities and the elderly.

– Diverts $484 million of motor vehicle sales tax revenue to support transit agencies that will lose $450 million a year when the Pennsylvania Turnpike Commission is no longer required to contribute the money on an annual basis .

— HUMAN SERVICES: increases by $2.2 billion, or 14%, to reach $18.3 billion.

— PRE-K and K-12 EDUCATION: Increases by $1.9 billion, or 19%, to reach $11.6 billion.

– HIGHER EDUCATION: Increases $170 million, or 10%, to $1.94 billion, not including an additional $150 million from the American Rescue Plan Act proposed for state system universities.

— CORRECTIONS AND CONDITIONAL RELEASE: increased by $88 million, or 8%, to $2.8 billion.

— PENSIONS: increases by approximately $200 million, or 5%, to $3.9 billion.

— DEBT: Growth of $79 million, or 7%, to $1.2 billion.

Source: Administration of Governor Tom Wolf.

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