The state budget is now more than 30 days past deadline. But rather than fretting, we’re a bit relieved. That’s because if history shows us anything, a fast budget is a dumb budget. Certainly, recent history backs that up. Gov. Tom Corbett touted his on-time record delivering a state budget as if that were the most important thing, but the actual budgets he typically delivered were exercises in misguided and simplistic priorities, like cutting education funding.
The champion of late budgets was Gov. Ed Rendell; state budgets took more than 100 days to pass in both 2003 and in 2009. Those battles were complicated partisan battles over priorities: Rendell’s priorities being education and energy, and the General Assembly’s being thwarting those priorities.
The current battle over the budget has similarities to those times, and not just because once again we have a Democratic governor in a Republican-dominated General Assembly. Gov. Wolf’s priorities include a tax on Marcellus gas extraction, halting the privatization of liquor stores and a cut to property taxes, offset by an increase in income and sales taxes. His budget would give a big boost to education spending.
The Republican budget would basically change nothing, repeating the “no new taxes” mantra that Corbett preferred. There would be property tax relief, but little money would be provided for schools. Lawmakers are continuing to balk at an extraction tax, want to privatize liquor stores and resolve the state’s pension problem.
The battle is really over change vs. the status quo. And that’s especially vexing, since the state is hardly thriving. Why would anyone want to hold onto our stagnant job growth, inadequate education funding and multiple hits to the state’s credit rating?
Wolf wants to shift the state’s reliance on funding education through property taxes, and boost education spending by millions. One stream of that funding would come from a 5 percent tax on gas extraction. This was a major campaign priority during his run and his success suggests that many people support that notion. We are the only state that does not have a tax on companies extracting gas from the Marcellus Shale.
According to a Pennsylvania Budget and Policy Center report, in 2013, the gas drilling companies extracted had a market value exceeding $11.8 billion; companies paid $223 million in impact fees in 2013, meaning an effective tax rate of less than 1.9 percent. The usual threat of an industry moving out of state is nonexistent in this case, since they are drilling through a rich reserve of gas that is in Pennsylvania — not anywhere else. Still, we’ve essentially given part of the state away as a gift to companies reaping huge revenues from our natural resources. It’s hard to understand why ... until you look at the campaign contributions from the Marcellus gas companies.
The standoff is causing pain to some nonprofits and the looming deadline of a new school year is a real threat, especially for Philadelphia, if resolution doesn’t come in the next few weeks. But Wolf’s election suggested that Pennsylvanians were sick of the status quo. Real change takes time, and this budget has the potential to be a road map for a new way of thinking about the state’s future.