On Nov. 6, 2018, Pennsylvanians go to the polls to elect their representatives to U.S. Congress and the state General Assembly. Voters also get to decide who will be occupying the governor’s mansion on Front St. in Harrisburg for the next four years. This year’s gubernatorial race pits two businessmen from York County. Incumbent Tom Wolf (D) – who shocked many four years ago by beating more well-established candidates in his primary and then the sitting governor – is being challenged by businessman and former state Sen. Scott Wagner (R).
The two candidates could not be further apart on the political spectrum. Wolf is an unabashed progressive Democrat, while Wagner’s smash-mouth brand of politics is best described as Trump-like. Neither one is a career politician: both have extensive business experience and strong ties to that community, and both have a sharp vision of the direction they want to take the state.
On Jan. 20, 2015, Wolf was sworn in as Pennsylvania’s 47th governor after defeating incumbent Republican Tom Corbett. Since taking office, Wolf has focused his policy efforts on building a strong workforce, increasing funding for public education, and improving access to health care.
In the key area of tax policy, Wolf has proposed in each of his four budgets a severance tax on the natural gas industry and combined reporting. Last February, as part of his 2018-2019 fiscal year budget plan, Wolf proposed a severance tax based on the volume of natural gas extracted. The proposal was sensitive to prices, with the tax rate dependent on market price. It’s unlikely that Wolf will back away from a severance tax given another term in office.
Wolf has championed changing how Pennsylvania corporations file their returns with the Department of Revenue: from the current separate company reporting system to a unitary basis. Closing the “Delaware loophole,” as it has become to be known, and lowering the state’s corporate net income tax would likely remain priorities if Wolf is reelected.
Public education funding has been a cornerstone of Wolf’s first term. Since taking office, Wolf has increased basic education funding to public schools by $633 million, or 11 percent. Other elementary and secondary education funding investments include those for special education, early childhood education, and career and technical education. If reelected, an emphasis on public education would be expected to continue.
To help grow manufacturing and jobs, Wolf supported a tax credit for manufacturers who create jobs in the state and implemented a plan to reduce red tape and make it easier to start or expand a small business in Pennsylvania. Wolf touts his economic policies as having served to secure such projects as a major FedEx project in the Lehigh Valley, a large Amazon expansion across Pennsylvania, investments in the Philadelphia port, and the Shell Oil Co. cracker plant in Western Pennsylvania. Wolf also supports increasing the state’s minimum wage to $12 per hour.
Like most elected officials, Wolf supports the idea of property tax reform, but he has no detailed plan to accomplish the objective. Instead, his campaign talks about the need to enact a severance tax dedicated to funding public education to alleviate pressure on taxpayers.
Wolf has been a strong proponent of workforce development initiatives. He has supported expanding apprenticeships and instituting policies to bring more computer courses to public schools.
In the area of health care, one of the first actions Wolf took as governor was to expand Medicaid, the joint federal and state program that helps with medical costs for those with limited income and resources. It also offers benefits not normally covered by Medicare, like nursing home care and personal care services.
Wagner is not a typical politician. The unwavering conservative is not afraid to say what’s on his mind. Wagner stormed onto Pennsylvania’s political scene in early 2014 when he ran a successful write-in campaign for York’s 28th state senatorial seat against the GOP’s hand-picked candidate. Wagner has been making waves in Harrisburg ever since. His hard-charging style may have ruffled a lot of feathers in the capitol, but he has established himself as someone who is not afraid to challenge the status quo.
In May, Wagner defeated Paul Mango and Laura Ellsworth to win the Republican primary for governor.
Pennsylvania’s finances is job No. 1 for the next governor. Wagner points to recent studies by U.S. News & World Report and WalletHub that have found hundreds of millions of dollars in taxpayers’ money that was wasted, poorly invested, or lost. Wagner’s plan is to implement a zero-based budgeting system, which would require state departments and agencies to justify each dollar of spending every year through budget reviews.
If elected governor, Wagner says his administration will focus on these five major tenets: eliminate wasteful spending, end the grip of special interests in Harrisburg, eliminate property taxes, create jobs and better incomes, and make government work for the people.
As a member of the state senate, Wagner supported landmark changes to the two state pension funds, which became Act 5 of 2017. As governor, Wagner says he will support a move to a full 401(k)-style defined contribution plan for public school employees and state employees.
Wagner favors comprehensive business tax reform, including lowering the state’s 9.99 percent corporate net income tax rate. He does not support moving to a combined reporting system.
Property tax reform is another priority issue for him. He says he will sign into law the Property Tax Elimination Act found in House and Senate bills 76. The plan purports to eliminate school property taxes by raising both the personal income tax and sales tax rates. The legislation would also expand the products and services subject to the state sales tax. Under this plan, many services provided by PICPA members may be subject to the expanded sales tax.
Wagner supports a more modest increase in the state’s minimum wage. As a member of the state Senate, Wagner sponsored Senate Bill 865, which called for a raise in the rate by $0.50 increments over the course of three years. Wagner’s legislation also provided for a “training wage” for everyone age 18 and younger that would be equal to the current $7.25 per hour minimum wage.
Remember, election day is Nov. 6. Make sure to check www.picpa.org/governorsrace
as we approach the election for more information on the candidates.
About the Candidates
Tom Wolf grew up in Mt. Wolf, Pa., a small southcentral town in York County. Wolf graduated from Dartmouth College (BA), the University of London (MA), and the Massachusetts Institute of Technology (PhD). During his studies, Wolf did a stint in the Peace Corps. From 2006 until early 2009, Wolf was secretary of revenue under Gov. Ed Rendell. Before becoming governor in 2015, Wolf was the owner of the Wolf Organization, a distributor of lumber and other building products. Wolf and Frances, his wife of more than 40 years, live in the house he grew up in. They have two grown daughters.
Scott Wagner hails from York County. Raised on a farm, Wagner graduated from Dallastown Area High School in 1973. He spent one year at Williamsport Area Community College (now Pennsylvania College of Technology) but left to pursue business ventures. Wagner started his first business when he was 19. He currently owns Penn Waste, a waste management business, and KBS Trucking, a trucking company. In 2013, Wagner launched his campaign for state Senate, and made history when he won the seat as a write-in candidate. Wagner resigned from the Senate on June 4, 2018, to concentrate on his gubernatorial campaign. Wagner and his wife Tracy live in York. They have four children.
Peter N. Calcara, CAE, is vice president of government relations for the PICPA. He can be reached at email@example.com.