Personal Taxes

Wolf is aiming for a rise in earnings tax to spice up college funding

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(* This story was updated on 2/2/21 at 3:00 p.m. to include new information on the administration’s tax plan, more details on their education funding plan, and a comment from Education Attorney Donna Cooper.)

Governor Tom Wolf will call on state lawmakers to approve an increase in Pennsylvania income tax to raise funds for public schools. He is expected to reveal the plan when he delivers his annual budget address to state lawmakers on Wednesday, the Associated Press first reported.

In a statement, the Democratic governor said he would ask the Republican-controlled General Assembly for up to $ 2 billion in new funding, with the largest portion, $ 1.35 billion, in addition to covering core costs such as teachers’ salaries and – The $ 6.8 billion currently received from the state will be used.

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The money would be driven through the state’s five-year-old school funding formula, which aims to level the playing field between the state’s richest and poorest school districts, the government said in its statement.

“We can have a great public school for every child in every neighborhood in Pennsylvania, good employment opportunities for anyone who wants them, and an economy strong enough to provide for everyone. It is possible to have a legislative agenda for this community that is good for families, good for businesses and good for the economy, “Wolf said in the statement. “Most of all, I think your family’s future is important enough that we should have this argument now instead of putting it off until next year and the year after and the year after. Let’s make Pennsylvania an even better place to live, work, and dream big for your children. “

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The government’s plan is also to increase subsidized childcare payment rates to keep pace with privately-paid families and ensure equal access to childcare for all Pennsylvanians. This would be funded by additional federal funding of $ 87.17 million “to support these increased base rates for childcare work and create a more stable business environment for childcare facilities,” the administration said.

In addition, schools would receive $ 200 million more to cover special education costs. This would come on top of the $ 1.2 billion they are currently receiving, on top of other sums of money, the AP reported, citing sources.

If approved, the state’s income tax would rise from its current 3.07 percent to 4.49 percent. The administration’s plan would increase the exemption for the low-paid, the AP reported, citing sources.

The government said its tax proposal would increase the state’s tax forgiveness credit, which would result in many families cutting or eliminating their taxes.

The administration’s plan provides for a tiered system of tax forgiveness:

  • $ 15,000 for individual filers
  • $ 30,000 for married filers
  • $ 10,000 allowance for each addict

Taxpayers with incomes at or below these thresholds would not owe any taxes. The tax forgiveness percentage would decrease 1 percentage point for every $ 500 above the threshold, resulting in 100 percent tax forgiveness, the administration said.

Before announcing his plan on Tuesday, Wolf had beefed up a much less ambitious political agenda for 2021, which took up many of the proposals he had already put to the General Assembly. The platform he outlined last week called on lawmakers to reconsider raising the minimum wage, balancing gas taxes with infrastructure, and legalizing recreational marijuana.

But his new budget forecast is Wolf’s most ambitious and one of the most far-reaching executive agendas Pennsylvania has seen in the past few decades, said Donna Cooper, a nonprofit executive who served as the former government’s top policy advisor. Ed Rendell.

“This could be a turning point for the state,” said Cooper. “It’s almost a collection of ideas that he offered during his tenure.”

But Cooper, who is Philadelphia’s executive director of Early Childhood Education for Public Citizens For Children and Youth, also argued that Wolf’s plan was “nothing radical.”

Other states have already approved the same minimum wage guidelines and childcare programs that Wolf is pursuing, she said. A case pending in the Commonwealth Court could force the state to invest billions of dollars more in public education to improve student performance.

Any delay in implementing these proposals could put Pennsylvania at a disadvantage for neighboring states, she said.

If we have to do anything after COVID, it’s a modern state and it’s showing people we can solve problems, ”Cooper said. “Any legislator who wants Pennsylvania to be a state that people move into and want to live in should take this seriously.”

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