Highlights of Gov. Tom Wolf’s fourth state budget proposal

HARRISBURG, Pa. (AP) - Highlights of Pennsylvania Gov. Tom Wolf’s spending plan for the 2018-19 budget year that starts July 1:

THE BIG PICTURE

- Increases spending through the state’s main bank account to $33 billion, an increase of $1 billion in new spending, or 3 percent of this year’s enacted budget of $32 billion.

- Does not increase tax rates on sales or income, the state’s two biggest sources of revenue.

- Counts on about $250 million from a new severance tax on natural gas production.

- Calls for lawmakers to raise the state minimum wage to $12 an hour, up from the federal minimum of $7.25 an hour, to save $100 million in social and human services costs.

TAXES AND FEES

- NATURAL GAS: Imposes a new tax on natural-gas production on a sliding scale based on the price of gas that, based on roughly 5 trillion cubic feet produced, would generate $200 million a year if the price of gas is $3 per thousand cubic feet or less and $250 million if the price of gas is $3.01 to $4.99 per thousand cubic feet. Effective July 1, 2018.

- CORPORATE INCOME TAXES: Restructures how the state would calculate corporate profits to adopt “combined reporting” and caps net operating losses at 40 percent, effective Jan. 1, 2019. Reduces current 9.99 percent tax rate to 9.49 percent in 2020, 8.99 percent in 2021, 8.49 percent in 2022 and 7.99 percent in 2023.

- Collects $25 per person fee from municipalities that do not have their own full-time police force and instead rely solely upon state police for coverage to raise $63 million.

EDUCATION

- Increases aid for public school operations and instruction by $100 million, or nearly 2 percent, to $6.1 billion.

- Increases aid for programs to expand high-demand computer and industrial skills training in high schools and colleges by $53 million, or 83 percent, to $117 million.

- Increases early-childhood education funding by $40 million, or 18 percent, to $266 million.

- Increases special education funding by $20 million, or 2 percent, to $1.14 billion.

- Increases aid to Pennsylvania State System of Higher Education by $15 million, or 3 percent, to $468 million.

SPENDING

- K-12 EDUCATION: Grows 5 percent to $13.5 billion.

- HIGHER EDUCATION: Grows about $17 million, or about 1 percent, to $1.76 billion.

- HEALTH AND HUMAN SERVICES: Grows about $220 million, or 2 percent, to $12.6 billion.

- CORRECTIONS AND PAROLE: Grows about $100 million, or 4 percent, to $2.5 billion.

- STATE POLICE: Grows about $84 million, or 7 percent, to $1.3 billion.

- PENSIONS: Grows $275 million, or 9 percent, to $3.2 billion.