Governor Wolf Proposes 11 Percent Spending Increase in 2021-22 Budget Address

Gov. Tom Wolf proposed hefty tax increases on business and individual taxpayers in his seventh state budget address, which he presented virtually on Wednesday, Feb. 3. The plan would spend $37.8 billion in the 2021-22 Fiscal year – an 11 percent increase over the current year. Central to the spending proposal is an increase in the state’s personal income tax, raising it from 3.07 percent to 4.49 percent. While the governor’s plan calls for exceptions from tax increases for those making $84,000 or less (which the governor referred to as being on the lower end of the income scale), a report by the Associated Press indicates that the PIT hike would amount to a nearly 50 percent tax hike for 60 percent of Pennsylvania taxpayers.

Roughly half of the new venue is proposed to be earmarked for K-12 public education while the rest would go toward closing a projected budget deficit. The governor is also relying on money from the federal government and another tax on the natural gas industry to pay for additional state spending.

PA Chamber President Gene Barr expressed concern about the impact of proposed PIT increase on the state’s business community. “The current PIT rate – and its application – is one of the bright spots of the state’s tax structure. In fact, if not for the PIT, Pennsylvania would rank much worse than our current placement of 27th on the Tax Foundation’s 2021 State Business Tax Climate Index. Make no mistake – this plan combined with the proposed minimum wage hike [a $15 proposal the PA Chamber responded to prior to the budget address] will devastate many of the small businesses in our communities. With so many unknowns surrounding our future, it’s counterintuitive to place additional burdens and hardships on the same people we’re relying on to drive our economic recovery forward.”

Rather than impose new tax increases, the PA Chamber is focused on restoring Pennsylvania’s economy through pro-growth policies that will attract investment and encourage employers and their workers to get vaccinated – goals outlined as part of the PA Chamber’s “Bringing PA Back” initiative.

“Commonsense reforms – such as targeted COVID liability protections; streamlining and simplifying the state’s tax code; reducing regulatory burdens; and creating greater government efficiency and connectivity – will go a long way toward making this happen. It’s critical that the private sector work collaboratively with lawmakers from both sides of the aisle. We are not adversaries, but people who share a vision of seeing this state overcoming the pandemic and move into a brighter future for everyone. By openly communicating and working together, Pennsylvania can – and will ­– rise to the challenge before us. We have the opportunity to set a new course – one with a thriving economy that will lead to more jobs and opportunities for all Pennsylvanians.”

The PA Chamber’s reaction to Gov. Wolf’s budget address was included in stories in the Pennsylvania Business Report, Pennlive and the Central Penn Business Journal.


Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.