Calm Before the Storm: An Analysis of Governor Wolf’s Proposed Budget for 2020-21

Originally published by KRC-PBPC here, By Diana Polson, Marc Stier, and Stephen Herzenberg We were in the last two weeks of work on this analysis of the governorā€™s proposed budget for the fiscal year beginning on July 1, 2020, when the political and economic world in which weā€™d been living tilted on its axis. The coronavirus that is responsible for the COVID-19 pandemic was creating havoc in China, both to the health of the population and to the economy of the country. It is now clear that the United States is heading into a recession. We should expect that our economy, and indeed the whole world, will suffer for some time. A recession will have a severe impact on the budget of Pennsylvania with regard to both revenues and expenditure. Revenues will certainly decline. And expenditures for human servicesā€”especially for Medical Assistance (Pennsylvaniaā€™s Medicaid program), Unemployment Compensation, SNAP (formerly calledā€¦ Continue reading

Corporate Tax Cuts Since 2002 Cost PA $4.2B Annually

By Stephen Herzenberg, Diana Polson, and Marc Stier Closing Delaware loophole, instituting worldwide combined reporting would level the playing field for small businesses and generate over $700 million a year to invest in PA communities This paper focuses onĀ the details ofĀ one part of this story:Ā the cuts in corporate taxesĀ in PennsylvaniaĀ since 2002Ā that haveĀ reduced revenuesĀ byĀ what is nowĀ $4.2 billion per yearĀ andĀ haveĀ created a tax system that is among the most unfair in the country.Ā Ā  Pennsylvaniaā€™s tax–cutting,Ā shaped by the corporate-sponsored narrative,Ā has taken a variety of forms. Under both Republican and DemocraticĀ governors, we haveĀ entirelyĀ eliminatedĀ oneĀ of our two majorĀ taxesĀ on corporations, the Capital Stock and FranchiseĀ TaxĀ (CSFT). WeĀ haveĀ alsoĀ allowed businesses to lower their reported profits subject to the largest remaining corporate taxā€”theĀ Corporate Net IncomeĀ (CNI) tax. And we have continued to give multi-state corporations free rein to cook their books and exploit corporate tax loopholes to their reported income subject to the CNI. TheĀ resultĀ isĀ that 73% of corporations that do business in Pennsylvaniaā€¦ Continue reading

Analysis of Governor Wolf’s Proposed 2019-20 State Budget

INTRODUCTION Some important things have changed in Pennsylvania politics as a result of the 2018 election. But the basic political dynamic that constrains our budget politics remains. We have a Democratic governor and a Republican-controlled General Assembly. And more importantly, we face an ideological division that partly maps onto the partisan one. On one side are those who believe that the only path to prosperity for our state is to cut taxes for the rich and for businesses, cut spending, and hold wages down. On the other sideā€”where the Pennsylvania Budget and Policy Center standsā€”are those who believe that prosperity for everyone requires us to raise wages and expand the safety net that protects those who need our help, invest in people through new educational initiatives at all levels and in workforce training, and invest in building our public infrastructure and protecting our environment. The priorities for spending found inā€¦ Continue reading

On the Supreme Court Janus v. AFSCME Decision

HARRISBURG ā€” Keystone Research Center executive director Stephen Herzenberg and Pennsylvania Budget and Policy Center director Marc Stier made the following statement regarding todayā€™s Janus v. AFSCME Supreme Court decision: ā€œIn a 5-4 decision that resulted directly from the [evasion of constitutional responsibility and] abuse of power that led to the appointment of Justice Neil Gorsuch, the United States Supreme Court today took another step to rig our economy and our politics against working families and to further diminish the collective rights of working people. By reversing the longstanding precedent set in the 1977 Abood case, the Janus decision makes the entire United States public sector a ā€˜right to work for lessā€™ country with the stroke of a pen. The decision deprives unions of any financial support from non-members who nonetheless benefit from union representation and collective bargaining to improve wages, benefits, and working conditions. The decision violates a fundamentalā€¦ Continue reading

Governor’s 2018-19 Budget Overview

With Diana Polson and Stephen Herzenberg In 2018-19, Governor Wolf has presented another austere budget that, within the political limits of Harrisburg, makes progress on issues critical to Pennsylvanians. But because of those political limits- and through no fault of the governor- it does not make fast enough progress. This document presents an overview of the Governor’s proposed 2018-19 budget, and how we believe it continues to move Pennsylvania forward despite difficult circumstances. Continue reading