Highlights of Gov. Tom Wolf’s 2022-23 budget plan

Wolf’s spending plan for Pennsylvania's 2022-23 fiscal year that starts July 1:

• The Associated Press
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  The Associated Press (AP) is a U.S.-based not-for-profit news agency headquartered in New York City.

Highlights of Democratic Gov. Tom Wolf’s spending plan for Pennsylvania’s 2022-23 fiscal year that starts July 1:

THE BIG PICTURE

— Increases spending through the state’s main bank account to $43.7 billion, or about 13% of this year’s enacted budget of $38.6 billion. Counting $3.5 billion in federal pandemic aid, spending on state operations is projected to be $41 billion in this fiscal year.

— Projects a surplus of $6.4 billion at the end of this fiscal year, but uses about $3 billion of it to prop up spending in 2022-23. Leaves intact $2.9 billion that is separately held in a restricted budget reserve account.

— Projects a 2% decrease in tax collections to $41.9 billion, as the economy slows. Does not increase the tax rate on income or sales, the state’s two biggest sources of revenue.

— Calls for lawmakers to raise the state minimum wage to $12 an hour on July 1, up from the federal minimum of $7.25 an hour, with annual increases of 50 cents until the minimum wage reaches $15 on July 1, 2028. Wolf’s proposed increase includes tipped workers.

TAXES AND FEES

— CORPORATE INCOME TAXES: Reduces the current 9.99% tax rate on corporate profits to 7.99% in 2023, 6.99% in 2026 and 5.99% in 2027. The change is estimated to reduce revenue in 2022-23 by $79 million, but would be accompanied by new rules “modernizing the tax base” to help ensure that large corporations do not shift profits out of state to lower-tax jurisdictions.

EDUCATION

— Requests about $1.8 billion more for instruction, operations and special education in public schools, or about 21% more. Of that, $300 million is set aside for the 100 poorest public school districts and $200 million is for special education.

— Requests $200 million annually to fund scholarships for students at a State System of Higher Education university if they remain in Pennsylvania for as long as they receive the benefit. Scholarship money would be targeted to high-demand degree programs. Of the $200 million, $88 million would come from a tax on slot-machine gambling that subsidizes the state’s horse racing industry and $112 million for each of the first two years would come from federal American Rescue Plan Act money approved by Congress last March.

— Establishes a statewide cyber-charter school tuition rate of $9,800 per student that would save $199 million a year for school districts and changes special education reimbursements for charter schools to save another $174 million a year for school districts.

HUMAN SERVICES

— Requests about $800 million to increase reimbursement rates for direct care workers under Medicaid who care for the disabled and elderly.

TRANSPORTATION

— Diverts $484 million from motor vehicle sales tax revenue to support public transit agencies that will lose $450 million annually when the Pennsylvania Turnpike Commission is no longer required to contribute the money on an annual basis.

SPENDING BY CATEGORY

— HUMAN SERVICES: Grows $2.2 billion, or 14%, to $18.3 billion.

— PRE-K and K-12 EDUCATION: Grows $1.9 billion, or 19%, to $11.6 billion.

— HIGHER EDUCATION: Grows $170 million, or 10%, to $1.94 billion, not including another $150 million in American Rescue Plan Act money proposed for state system universities.

— CORRECTIONS AND PAROLE: Grows $88 million, or 8%, to $2.8 billion.

— PENSIONS: Grows about $200 million, or 5%, to $3.9 billion.

— DEBT: Grows $79 million, or 7%, to $1.2 billion.

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Source: Gov. Tom Wolf’s administration.