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Wolf needs to hit the ground running

By Ron Whitehorne on Nov 12, 2014 01:09 PM

Tom Wolf won the governor’s race because he made this election about education and he aggressively challenged Tom Corbett’s budget austerity narrative. Wolf put forward bold proposals for funding schools, including taxing shale, closing corporate loopholes, and creating a progressive state income tax.  

A landslide vote, running against a strong Republican tide nationally and in local legislative races, allows him to claim a mandate for moving ahead on this agenda.

But it won’t be easy. The legislature, both House and Senate, is dominated by conservative Republicans. And the state faces a massive deficit, thanks to the budget passed this year by the Corbett team, which plugged the fiscal holes with lots of one-time gimmicks.

A chorus of pundits are saying that this will require compromise on Wolf’s part. This is undoubtedly true, but what Wolf must do is strengthen his position at the bargaining table by reaching out and mobilizing the millions of Pennsylvanians across the state who want decent education and fear the impact of spiraling property taxes in their communities.

Wolf should use the first 100 days to establish himself as the education governor by going to the people with a message that, because of cuts to schools and warped priorities in Harrisburg, we face a grave crisis that threatens the future of the state. Funding is the first priority, but he also needs to promote an alternative to the market-based version of school reform that is undermining public education.   

The 100-day agenda could be:

  • Get the legislature to pass a 5 percent extraction tax on Marcellus Shale, close corporate loopholes and scale back prison construction.
     
  • Propose an equitable funding formula that insures funding for quality schools in all communities in our state.
     
  • Declare his support for a moratorium on charter school expansion until legislation to check waste, fraud, and abuse in this sector is adopted and implemented.
     
  • Appoint a secretary of education who is committed to developing community schools that engage parents and neighborhoods as partners, creating engaging curricula, and using restorative justice over punitive, zero-tolerance policies.


To realize these goals will require mobilizing the education base to overcome the recalcitrance of many of the GOP legislators. However, because the alternative to new funding is either more cuts or higher property taxes, a coalition that includes a significant number of Republicans around funding is possible.

Sticking to business as usual would squander the opportunity that the first 100 days present. The governor-elect needs to go on a listening tour of the state to hear from people about their schools and let them know his plan for fixing them. He could call a summit of state leaders to dramatize that we face a serious crisis and help forge consensus around his school funding initiatives.

Critical to success is that education advocates continue to mobilize and play an active role in the shaping of the Wolf administration and its policies. We must push Wolf to follow through on his campaign promises while simultaneously supporting him by lobbying and staying in the streets. We know what happens when an aroused electorate thinks the job is done once the polls close.   

 

Ron Whitehorne is a retired teacher and a coordinator for the Philadelphia Coalition Advocating for Public Schools (PCAPS).


The opinions expressed are solely those of the author.

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Comments (17)

Submitted by Anonymous (not verified) on November 12, 2014 4:57 pm

Ron, do you mind if I tell Governor Wolf that he should use you as an advisor. You always write things that make so much sense. 

Submitted by Rich Migliore (not verified) on November 12, 2014 4:30 pm

That was me who wrote that. Gotta put my name behind what I say.

Submitted by Peg Devine on November 12, 2014 8:14 pm

I can think of one more 100 day agenda item: Tell the SRC to vote to disband

Submitted by Taxpayer (not verified) on November 13, 2014 2:30 pm

Wolf got elected because Corbett didn't even try to win. Let's see how popular Wolf is now that he has a $2 Billion deficit to close, less than the $5 Billion Corbett had to close. Wolf will be a lame duck as soon as he walks into his office. As much as he would like to raise our taxes to hand our money off to his public sector union and public assistance supporters, the Reublicans in the state legislature will not allow him to do so.

Submitted by Ron Whitehorne on November 13, 2014 8:11 pm

Yes, big deficit coming thanks to Corbett and the Republicans putting forward a gimmick laden budget without new revenue.   

Submitted by Anonymous (not verified) on November 14, 2014 10:18 am

Some inconvenient facts abound. 

A shale tax might add up to $1 billion a year, though with lower prices it might be less. So the first 50 or so years of this tax would be absorbed paying for state's $50 billion pension debt, assuming the shale tax grows at the same rate as the pension debt. And assuming Wolf refuses to change the benefits side.

Little will be left over from the shale tax to fund education. 

PA already has the highest corporate tax rate in the US at 9.9%.  Raising "business taxes" is a good sound bite for low information voters, but bad policy. Wolf knows this as a businessman. 

Sales tax is average at 6%, though 1/3 of the state borders 0% Delaware, so increasing sales tax drives is inefficient and drives much business out of state.  

PA's personal income tax rate is relatively low.
 
Republicans in the Senate are 1 vote from a veto proof majority. House is nearly the same. 
 
There is 0% chance of a "progressive" income tax. The legislature won't pass it, and if they did it is likely unconstitutional. 
 
 
Wolf has one place to go to raise real revenue- that is the state personal income tax or sales tax. Both will affect pretty much every resident in the state. 
 

Corbett won in 2010 with 54.5% of vote. 

Wolf won in 2014 with 54.9% of vote. 

Claiming Wolf has a mandate to radically jack up everyone's taxes while not dealing with any of the spending side issues is pure spin.  

Submitted by Anonymous (not verified) on November 14, 2014 10:24 am

Some inconvenient facts abound. 

A shale tax might add up to $1 billion a year, though with lower prices it might be less. So the first 50 or so years of this tax would be absorbed paying for state's $50 billion pension debt, assuming the shale tax grows at the same rate as the pension debt. And assuming Wolf refuses to change the benefits side.

Little will be left over from the shale tax to fund education. 

PA already has the highest corporate tax rate in the US at 9.9%.  Raising "business taxes" is a good sound bite for low information voters, but bad policy. Wolf knows this as a businessman. 

Sales tax is average at 6%, though 1/3 of the state borders 0% Delaware, so increasing sales tax drives is inefficient and drives much business out of state.  

PA's personal income tax rate is relatively low.
 
Republicans in the Senate are 1 vote from a veto proof majority. House is nearly the same. 
 
There is 0% chance of a "progressive" income tax. The legislature won't pass it, and if they did it is likely unconstitutional. 
 
 
Wolf has one place to go to raise real revenue- that is the state personal income tax or sales tax. Both will affect pretty much every resident in the state. 
 

Corbett won in 2010 with 54.5% of vote. 

Wolf won in 2014 with 54.9% of vote. 

Claiming Wolf has a mandate to radically jack up everyone's taxes while not dealing with any of the spending side issues is pure spin.  

Submitted by Ron Whitehorne on November 14, 2014 11:41 am

You are the one talking about "jacking up everyone's taxes".    The shale tax targets the energy companies who got a free ride under Corbett.   Wolf's income tax proposal, while not fully developed, has emphasized cutting taxes for low and middle income earners while raising them for high income people.   The prospects for this passing in the legislature or passing muster in the courts is a different question.

Pensions are a critical issue.   A financial transaction tax, like the one advocated by Tim Potts, school board member in Carlisle and former Director of Democracy Rising PA, could address this problem without further rasing property taxes and freeing revenue to go to classrooms.   But that would require bucking Wall St. and the Chamber of Commerce which you clearly have no taste for.

Submitted by Anonymous (not verified) on November 14, 2014 2:50 pm

I agree with the shale tax. it is overdue. 

I also think the state income tax should be applied to pension income, currently taxed at 0% at contribution and 0% at withdraw. That is fair, the way almost every other state taxes it. 

After that, maybe the state income tax needs to go up too. Everyone will pay and everyone should ask if everything possible has been done to reduce the cost side of the equation, specifically pension costs that are driving states and school districts ongoing financial crises. 

 

 

Submitted by Anonymous (not verified) on November 14, 2014 2:52 pm

Though I do like the idea of a financial transaction tax, it is difficult to do even at a national/ multi-national level. 

Implementing on a state basis is just silly. It is avoidable and unenforcable. Businesses and the rich can just move their assets (or transactions) to an entity in another state. You might be able to skim something off of average people's 401K's or mutual fund accounts, but then again that's probably a violation of federal law. 

 

Submitted by Ron Whitehorne on November 14, 2014 8:23 pm

According to the author of this proposal the financial transaction tax  "would operate like a sales tax and would be simple to collect. Brokers who execute trading orders for PA residents – identified by their zip code – would automatically transmit the tax to the State Treasury based on the value of the transaction. 

This makes the tax nearly impossible to evade".     Not silly at all, very doable if the poltical will is there.

Submitted by Anonymous (not verified) on November 15, 2014 11:52 am

You're right. No rich person would ever have a house outside of pa to use as an address. Lol.

Submitted by Anonymous (not verified) on November 15, 2014 11:10 am

Nor would any rich person apparently ever do business with a broker located outside of pa.

This is an idea that makes philly's idiotic cigarette tax look highly effective. 

Most middle class people I think are suspicious of progressive income tax because they understand your other guy behind the curtain who will pay all the new taxes- it will be them. Half baked ideas like this only confirm it.

Submitted by Ron Whitehorne on November 14, 2014 11:41 am

You are the one talking about "jacking up everyone's taxes".    The shale tax targets the energy companies who got a free ride under Corbett.   Wolf's income tax proposal, while not fully developed, has emphasized cutting taxes for low and middle income earners while raising them for high income people.   The prospects for this passing in the legislature or passing muster in the courts is a different question.

Pensions are a critical issue.   A financial transaction tax, like the one advocated by Tim Potts, school board member in Carlisle and former Director of Democracy Rising PA, could address this problem without further rasing property taxes and freeing revenue to go to classrooms.   But that would require bucking Wall St. and the Chamber of Commerce which you clearly have no taste for.

Submitted by Tim Potts (not verified) on November 15, 2014 8:29 am

Whoever claimed there are problems with the financial transaction tax at a national level is right. However, at the state level, all of those problems disappear, those problems having to do with incentives that can distort investor decisions. Of course, there are plenty of such incentives now, none of which seem to bother people enough to change them.

The financial transaction tax hits people whose purchases are exempt from taxation now. For example, someone who buys a $20,000 car pays $1,200 in sales taxes on that purchase. Someone who buys $20,000 of a car company's stock pays no tax at all on that purchase. Who thinks this is fair?

A financial transaction tax of just 3/10 of 1% would yield between $3.5 Billion and $7 Billion a year in PA. My proposal is to dedicate this revenue to paying down the pension debt. This immediately releases $2.2 Billion this year ($3 Billion next year) from the state budget that is now being used to stabilize the pension systems without actually solving the problem. This new revenue allows an end to the capital stock and franchise tax, cuts property taxes by more than $2 Billion, and many other things. In fact, a financial transaction tax of just 9/10th of 1% could eliminate all property taxes statewide.

This would be a new tax in PA, but it already exists in New York and 40 countries around the world. It's been in force in England since 1694.

Those who recite the "no new taxes" mantra should consider that "no new taxes" means the "same old taxes" piled higher and higher on the "same old taxpayers." The Carlisle Area School District proves the point. The share of property taxes paying for pensions has increased mroe than 2,000% since the pension grab of 2001 (wages have increased 47%). This is typical of what has happened in all 500 schol districts. If you like that more than you like a financial transaction tax, you're close to being alone.

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