HARRISBURG, Pa. (AP) — Gov. Tom Wolf will propose a sweeping new plan to dramatically boost funding for public schools, to be supported by an increase in Pennsylvania's personal income tax rate that also expands exemptions for lower-wage earners, administration officials said Tuesday.
Wolf's administration began releasing details of the plan to The Associated Press ahead of Wednesday's planned budget address.
Under the plan for the fiscal year beginning July 1, Wolf, a Democrat, will ask the Republican-controlled Legislature for what Republicans say will be a $7 billion, full-year increase in the personal income tax, before refunds, or almost 50% more. Wolf's office said it would raise $4 billion over a full-year, or about 25% more.
That, under Wolf's plan, would provide a massive boost to public schools and help fill a multibillion-dollar deficit inflicted by the pandemic. Expanding exemptions in the personal income tax means that two-thirds of income-tax payers will pay less or the same, administration officials said.
The scope of the proposal rivals the budget Wolf proposed in his first year in office, which hit solid Republican opposition and never passed. This one, also, is likely doomed to see staunch Republican opposition, as well, as Republicans try to keep the focus on the vaccine rollout.
Rep. Jesse Topper, vice chair of the House Appropriations Committee, called Wolf's proposal “pretty much a progressive wish list that even he understands won't come to fruition.”
“The best thing we can do for students is get them back in the classroom and the worst thing we can do for Pennsylvanians is enact the largest income tax increase in history,” said Topper, R-Fulton.
Top Democrats embraced the proposal as strong and necessary in the wake of the damage inflicted by the pandemic, while progressive groups and school associations were enthusiastic.
“The governor is demonstrating his commitment to public education and we are hopeful and cautiously optimistic that this focus will shine a light on the many long-standing issues that need to be addressed in public education,” Nathan Mains, CEO of the Pennsylvania School Boards Association, said in a statement.
Wolf's proposal carries what could approach $2 billion extra for public schools, an increase of more than 20%.
The biggest part of that, $1.35 billion, would be distributed to schools to pay for their primary operations, like teacher salaries, operating costs and supplies, on top of the $6.8 billion they currently receive, Jen Swails, Wolf's budget secretary, said in an interview.
The majority of that $8.1 billion would go out through a 5-year-old school funding formula designed to iron out inequities in how Pennsylvania funds the poorest public schools. A portion of it — about $1.1 billion — would ensure that no school district receives less than it does now.
Pennsylvania barely uses that funding formula, and Wolf's proposal comes as a trial nears in a lawsuit filed in 2014 by a handful of school districts that accuses the state of inadequately funding public education.
Deborah Gordon Klehr, executive director of the Education Law Center, which is helping represent the school districts in that case, said Wolf's proposal recognizes the deep inequities in funding for the poorest public schools.
She called it “a giant step in the right direction that helps to tackles the chronic shortfalls in state funding for both basic education and special education.”
Schools also would receive another $200 million for special education aid, on top of the $1.2 billion they currently receive, plus $200 million for school construction and revisions to how charter and cyber charter schools are paid that could yield $229 million in savings for public schools.
The personal income tax increase would take the flat rate to 4.49% from 3.07% — among the nation's lowest — but increase the exemption for the lowest earners.
Under that scenario, the lowest earners — about 40% of the total — would pay less in income tax, while approximately the top one-third of taxpayers would pay more, Swails said.
A household of four earning above $50,000, but below $84,000, would see a tax cut, it said. A household of four earning above $84,000 would pay more, the governor’s office said.
The last increase in Pennsylvania's personal income tax rate took effect in 2004.
The tax exemption will expand to $15,000 for single filers from $6,500 currently, and from $10,000 for each dependent from $9,500 currently. The exemption for a family of four would go to $50,000 from $32,000 currently, meaning that households earning under $50,000 would pay not state income tax, the governor's office said.
Courts have interpreted the state constitution to require a flat income tax, rather than a graduated income tax rate that many other states have.
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