Wolf renews battles on natural gas, minimum wage in budget

HARRISBURG, Pa. -- Democratic Gov. Tom Wolf's election-year budget plan unveiled Tuesday will renew battles with the Republican-controlled Legislature over imposing a tax on Marcellus Shale natural gas and increasing the minimum wage.

Wolf's budget plan, his fourth and final first-term proposal, would boost spending by about $1 billion, or 3 percent, to $33 billion for the fiscal year beginning July 1. The higher spending would go toward public schools, skills training, pension obligations, prison costs and social services for children, the elderly and disabled.

In a prepared copy of his speech to a joint session of the state House and Senate in the Capitol, Wolf reels off a list of his perceived accomplishments in office. But he also gives a nod to his battles with the Legislature's huge Republican majorities, which have rejected billions of dollars in tax increases sought by Wolf and forced him to adopt more austerity in budget-making.

"Sometimes, we've worked our way to compromise. Sometimes, I've been forced to move forward on my own," Wolf says in a copy of his prepared remarks. "We still have a lot of work to do. By taking on the status quo here in Harrisburg, we've already begun to write a new story for our commonwealth. Not a story about a past we'll never get back. But a story about a brighter future we can build together - if we can muster up the political will to do it."

Wolf, who is seeking a second term in November's election, will count on an improving fiscal picture - potentially aided by December's federal tax overhaul law - to pave a smoother budget process after three years dominated by protracted partisan stalemates over how to plug gaping deficits.

Wolf now projects no deficit next year, although independent analysts have cast doubt on the administration's contention that it has fixed Pennsylvania's entrenched post-recession deficit.

Wolf will not seek an increase in sales or income taxes, but the new budget plan would rely on about $250 million from a new Marcellus Shale tax - Wolf's fourth straight attempt to impose one - and $100 million in savings on human services programs. Administration officials say the savings would come from reduced demand for the services because of an increase in the minimum wage to $12 an hour, up from the federal minimum of $7.25.

Wolf also will make a second request for municipalities to start paying a $25 per-person fee for the free state police coverage they receive, a total of $63 million a year. Like a Marcellus Shale tax and a minimum wage increase, the state police fee has been blocked by Republican lawmakers.

Wolf's budget also projects a big expansion of lottery games, approved by lawmakers last October, to allow keno and virtual sports games in bars and lottery games online.

Public schools would get another $100 million for operations and instruction, a bump of less than 2 percent, while more money would go to special education, early childhood education and state-owned universities.

Wolf will seek big increases for programs to help high schools and colleges teach high-demand computer and industrial skills and to subsidize child care for low-income working parents.

The County Commissioners Association of Pennsylvania said it expected a "hold-the-line budget" for social services costs that reflects the state's tight budgets. The Pennsylvania School Boards Association said it was pleased with an increase in state aid, but pointed out that school districts will still face a much larger increase in costs.

Wolf's proposal comes on the heels of a budget agreement last fall that relied heavily on borrowing and other one-time cash maneuvers to backfill Pennsylvania's biggest shortfall since the recession.

This year, revenue growth is expected to improve, while key cost pressures have eased. Wolf also has sought to squeeze out savings by shrinking the workforce and consolidating administrative operations in state agencies.

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