Pennsylvania Gov. Tom Wolf's proposed $36.1 billion
The fiscal year starts July 1. The budget is the sixth for Democrat Wolf, who works with a Republican-dominated legislature.
Wolf wants the legislature to expend a redevelopment grant program by $1 billion to tackle lead and asbestos in schools, while streamlining the process to enable school districts to apply for the funding.
"Instead of chipping away at this problem bit by bit, let’s make 2020 the year we act decisively to repair our school infrastructure," Wolf told members of the General Assembly at the state capitol in Harrisburg.
Asbestos has forced the closings of some schools in Philadelphia and Scranton.
Wolf seeks $435 million in new education funding, including $100 million in the fair funding formula, an additional $25 million for special education, and a $30 million hike for early childhood education.
The governor's repeat call on charter schools could generate headwinds from the Republican-controlled legislature. Wolf wants to change how charter schools calculate tuition rates and special education payments, which he said would save school districts a combined $280 million in charter school transfers.
"Some [charter schools] are little more than fronts for private management companies, and the only innovations they’re coming up with involve finding new ways to take money out of the pockets of property taxpayers — like setting up sham online schools or exploiting a loophole in special education funding," Wolf said.
Wolf is also proposing an increase in the minimum wage to $12 per hour on July 1, 2020, with annual increases to $15 per hour by July 1, 2026.
Fitch Ratings in July
Countering a trend of late budgets, Wolf and the legislature last June agreed to a $34 billion fiscal 2020 spending plan on time and without political bickering.
The new budget calls for no direct deposits into the state's rainy-day fund. Wolf last year announced a $317 million deposit, the commonwealth's largest such transfer in two decades.
Moody’s Investors Service and S&P Global Ratings rate Pennsylvania general obligation bonds Aa3 and A-plus, respectively, both with stable outlooks.
"Fund balance and budget reserves are improving, but remain weak as a share of the state's budget compared to most states," Moody's said in a Jan. 21 commentary. "This is mitigated by capacity to borrow internally from a fairly sound and stable pool of liquidity."
Commonwealth Foundation said Wolf's borrowing mortgages Pennsylvania's future.
The school-facility borrowing, said the right-leaning think tank, comes after Wolf and the legislature authorized the Commonwealth Financing Authority to borrow $2.5 billion for school construction a few years ago. It also cited the governor's so-called Restore PA proposal, which seeks $4.5 billion in new debt for local infrastructure projects.
"Unsurprisingly, Wolf proposes spending all those borrowed funds during his term in office, while our children will be paying off the debt with interest for the next 30 years," Commonwealth Foundation said.
Marc Stier, director of the left-leaning Pennsylvania Budget and Policy Center, said Wolf's proposal improves on the current-year budget, while acknowledging the challenges of working with an opposition legislature,
"It proposes new spending in high priority areas — especially in critical human services, education at all levels, infrastructure, and the environment — while also calling for spending and tax reforms that will make government more effective, efficient, and fair," he said.
Stier, though, said the state still needs major new public investments in areas such as schools and climate resilience.
"From that point of view, the budget falls short," he said. "“We have held Pennsylvanian budgets up to this higher standard for almost 10 years and found them wanting. And this year, as in the last five years, we again offer the same explanation for the failure to meet it."
