KEYSTONE CROSSROADS — Pennsylvania Republican gubernatorial candidate Scott Wagner has a plan to pump an additional $1 billion into public schools without raising taxes.
He says he’d do four things to make that happen: privatize the sale of alcohol, lease its liquor wholesale system, slash corporate welfare “that has no positive economic impact,” and reform the welfare system.
His campaign says the numbers add up, and at least one think tank backs that assertion.
Governor Tom Wolf, Wagner’s opponent, calls it “abracadabra math,” and another think tank agrees with Wolf’s position.
There’s been no independent analysis of Wagner’s recently released proposal, which leaves both sides with plenty of ammunition on an issue that’s already dominated the gubernatorial debate thus far.
“He’s just proposing this bogus plan,” said Wolf campaign spokesperson Beth Melena. “It’s made up of complete, abracadabra math.”
Andrew Romeo with the Wagner campaign shot back:
“The math is there,” he said. “They can call it ‘abracadabra math’ all they want. Because the bottom line is, they don’t have a plan.”
Wolf’s camp has not said how much the governor wants to increase education funding over the next four years or how he would raise additional money.
The campaign points to Wolf’s track record of increasing education spending, and said Wolf would continue to fight for more school dollars.
When Wolf first ran, he called for a $3.2 billion increase in basic education spending from 2015 through 2022.
To that end, proposals in Wolf’s first term included raising state taxes on sales and personal income — as well as implementing a severance tax on natural gas drilling. None of these occurred, and, so far, he’s secured a little less than $600 million of his initial wish.
Wolf avoided calls for sales or income tax increases in the most recent budget cycle. And now, in campaign mode, the governor has been reluctant to offer specific details on the education boosts he’d seek in a second term.
Wagner’s plan has numbers behind it, but scant analytical support to demonstrate how he’d rake in $1 billion without a tax hike.
Wagner’s campaign estimates the privatization of alcohol sales will generate $300 million initially and another $100 million in recurring revenue and that leasing the liquor wholesale system will produce $200 million a year. They peg corporate welfare reform for another $300 million each year and other welfare reforms at $600 million.
Asked what type of corporate welfare programs Wagner might target as governor, Romeo mentioned Keystone Innovation Zones and Keystone Opportunities Zones, both of which are designed to incentivize economic development in targeted neighborhoods.
Eliminating those two programs would net the state $110.1 million, according to calculations by the Commonwealth Foundation, a free-market Harrisburg think tank.
Overall, the Commonwealth Foundation has identified over $825 million annually in what it considers corporate welfare programs. Based on that number alone, the group thinks Wagner could theoretically generate $1 billion for schools, though the politics of that maneuver might get tricky.
“I do think that it is feasible budgetarily,” said Nathan Benefield, the think tank’s vice president and COO. “Whether it’s politically feasible or not is another question.”
Benefield also questions whether savings generated by Wagner’s proposal should be redirected to classrooms. He prefers the state use new money to offset tax cuts.
“More money has not led to better results,” Benefield said of Pennsylvania’s education system.
Marc Stier, director of the Pennsylvania Budget and Policy Center, another Harrisburg think tank, does think the state should boost dollars flowing to classrooms. He disagrees, however, with any analysis that supposes Wagner could meet his $1 billion goal without raising taxes.
Although some Republicans claim privatizing liquor sales would generate revenue, his group claims it would actually cost the state money. Because Pennsylvania purchases alcohol directly from sellers, it’s able to buy at a lower cost and then tax at a high rate, he said. Privatization would result in either higher prices or lower taxes, either of which would hurt state coffers, Stier argued.
“So all of a sudden this is his magic plan to spend more on education,” Stier said. “It just doesn’t add up.”
He also disputes Wagner’s math on corporate welfare, claiming that many economic stimulus programs — with the exception of a $238 million subsidy for the horseracing industry — benefit Pennsylvania. Banking on corporate welfare reform or liquor privatization to fund schools won’t work, he argued.
“All of this stuff is political fantasy,” Stier said.
Democrats also question Wagner’s sincerity. Unlike Wolf, he opposes a funding lawsuit that could force the state to spend more on schools.
And as recently as the Republican primary, Wagner has suggested districts already have enough money. Most famously, he once piloted a helicopter over several York-area schools in an effort to showcase the lavish expenses of some district facilities.
“Scott Wagner now claiming that he’s pro-education is a complete joke,” said Melena.
Wagner’s campaign, though, says the candidate is dead serious. The GOP nominee only opposes more money in the education system if Wolf is the one overseeing it, his spokesman said.
“We can spend more money if it’s being spent wisely,” Romeo said.
Wagner’s plan also includes policy initiatives favored by school choice advocates. It calls for an expansion of voucher-like programs that help students attend private school. Wagner also favors changes to the charter school law typically backed by charter advocates.
Of the $1 billion generated through the proposal, Wagner calls for $700 million to go through the new student-weighted school funding formula and another $300 million to be doled out through two competitive block grant programs. One of those programs would steer extra money to highly rated teachers; another would mimic the Obama-era “Race to the Top” program, rewarding districts that implement “evidence-backed reforms.”
Wagner’s plan also focuses on school safety, and says the state should encourage schools to install scanners at points of entry and hire school police officers.