Last year, nearly 50 of our neighbors fled Pennsylvania every day. They moved to growing states like Texas, Florida and North Carolina, seeking opportunity.
Meanwhile, we literally can’t pay businesses enough to come here. Recall that Amazon rejected $5 billion in taxpayer-funded bribes and set up “HQ2” elsewhere.
It’s time to ask ourselves why families and job creators are fleeing. The fact is, our burdensome taxes are pushing people away. The last thing we need is to raise the cost of starting a family or opening a business in Pennsylvania.
That’s why it was refreshing to hear Gov. Wolf launch his budget proposal this week touting “no new taxes.” Maybe he recognizes that slipping favored businesses $847 million each year isn’t working — and that our corporate income tax, second-highest in America, has something to do with that.
But Wolf’s rhetoric is bizarrely disingenuous. Just days earlier, the governor called for one of the highest natural gas taxes in the nation to fund a $4.5 billion borrowing plan. This energy tax won’t just hit drilling companies. More than 2.7 million Pennsylvania households heat their homes with natural gas. When utilities are expensive for families and businesses, the cost of living soars.
The systematic problems
While Wolf did propose lowering our corporate tax rate, he also glossed over systemic problems — unbalanced budgets, corrupt favoritism, and excessive spending — with good-sounding rhetoric. He talked most about growing government, proposing new commissions, initiatives, and increases to some of the state’s largest cost drivers.
More of the same isn’t going to turn Pennsylvania into a destination state. It’s time to break from the past and grow government sustainably. That means keeping spending at a rate Pennsylvanians can afford.
Spending by rate of inflation
The Taxpayer Protection Act (TPA), which passed the House last session and both the House and Senate in prior years, would accomplish this by limiting spending to the rate of inflation plus population growth. Unfortunately, Wolf is headed in wrong direction, proposing $34.1 billion in spending—well beyond the TPA limit.
Wolf is right that education is key to a thriving workforce, but a great education system isn’t measured by how much we spend — it’s measured by how well it serves students. Pennsylvania ranks among the top ten education spenders, but too many of our kids suffer from sub-par schools.
Meanwhile, tens of thousands of families want to escape low-performing schools, but are denied access to scholarships that would make this possible. It’s time to raise the limits on these programs to meet parents’ demand.
Our next generation of workers is extremely diverse, so why is our education system one-size-fits-all?
Incentives to work
We’ll never have the workers we need if thousands of able-bodied Pennsylvanians have no incentive to get jobs. In October, Wolf vetoed legislation that would have required work-capable adults without children to work or volunteer while receiving Medicaid benefits. That crucial bill would have helped transform lives, because only work can break the cycle of poverty.
Focusing on outcomes works for education, social services and criminal justice, too. Pennsylvania’s pioneering Justice Reinvestment Initiative of 2012 caused an historic decline in our state prison population while crime rates consistently dropped. As Wolf rightly pointed out, “We cannot comprehensively address our workforce development system without fixing our criminal justice system.”
That’s why momentum is building behind a second round of criminal justice reforms. Eliminating red tape in our antiquated probation and parole systems, reducing barriers to work like occupational licensing, and focusing resources on local solutions will help individuals regain independence and protect public safety. If similar bills like the First Step Act can pass in polarized Washington, we can push these reforms over the finish line in Pennsylvania.
Crossing the aisle isn’t dead, in D.C. or in Harrisburg. The silver lining of Wolf’s budget address is the vision we share — though we may disagree on solutions. In his speech, the governor lauded “our tradition of limited government and individual responsibility,” and we wholeheartedly agree.
Pennsylvanians have what it takes to build a brighter future for themselves and their families. If the governor opens the door to smarter budgeting, educational opportunity and welfare and criminal justice policies that strengthen our workforce, that future won’t be too far away.
(Benefield is vice president and COO for the Commonwealth Foundation (CommonwealthFoundation.org), Pennsylvania’s free market think tank.)