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Pennsylvania Governor Shares Federal Tax Policy Priorities

Dated Sep. 14, 2021

SUMMARY BY TAX ANALYSTS

Pennsylvania Gov. Tom Wolf (D) sent a letter to the state's U.S. congressional delegation on his federal legislative priorities that could provide a "sustained and equitable economic recovery" from COVID-19 financial disruptions, including tax provisions that mirror those in his proposed state budget, as well as tax credits for clean energy and additional tax cuts for low- and middle-income individuals and families.

September 10, 2021

Dear Members of the Pennsylvania Congressional Delegation:

I want to thank you all for your continued cooperation throughout this past year. Together, we have navigated vaccine distribution and the American Rescue Plan (ARP) implementation. Your advocacy and assistance at the federal level has been critical to delivering the resources that Pennsylvania needs to navigate these unprecedented situations.

Now that Congress has agreed on a path forward for the Senate Bipartisan Infrastructure Framework and will be moving onto considering major aspects of President Biden's American Families Plan, I wanted to share my priorities for this critical piece of legislation that will make crucial investments in the American people and pave the way for a sustained and equitable economic recovery from the COVID-19 pandemic.

As result of the funding made possible by the ARP, Pennsylvania has seen the lowest health insurance premium rates in history. Pennsylvanians who were previously ineligible for subsidies have since become eligible, which has enticed previously uninsured people to enroll in health coverage. We must ensure that the subsidies created under the ARP be made permanent so Pennsylvanians will have sustained access to quality and affordable healthcare plans.

To protect the health and well-being of Pennsylvanians, the budget reconciliation package should include a comprehensive paid sick and family leave policy. Paid sick and family leave policies support healthy individuals, families, and communities, and are a critical tool to promote and protect public health. Ensuring that all Pennsylvanians have access to paid leave creates a more equitable society while also protecting public health and strengthening families and communities. The COVID-19 pandemic has highlighted the importance of paid leave in curbing the transmission of contagious diseases. Pennsylvanians must be able to care for their health without risk of loss of income or employment.

Addressing the global climate crisis is one of the most important and critical challenges we face. Even as we continue work to mitigate the spread of COVID-19, we cannot neglect our responsibility and our efforts to combat climate change. We should use this legislation as an opportunity to extend and expand tax incentives and credits for clean energy and clean transportation that will allow us to continue to diversify our grid with clean renewable sources of energy and promote widespread deployment of electric vehicles and charging infrastructure. These investments should explicitly support domestic clean energy manufacturing that will help put Pennsylvanians to work in family sustaining jobs. As we look for additional ways to create jobs, I urge you to establish a Civilian Conservation Corps that would hire individuals to work on projects to combat the impacts of climate change. I also urge you to use this opportunity to create a Chesapeake Bay Resilient Farms Initiative (CRFI). This funding would offer the most cost-effective solutions for farmers and primarily target watersheds around the Susquehanna River, which are known to have the greatest influence on the Chesapeake Bay.

It is vital that this legislation create protections for Dreamers, TPS holders, and essential immigrant workers to ensure an equitable economic recovery for all communities across Pennsylvania. Providing a path to citizenship for these individuals and their families recognizes the important role they continue to play in Pennsylvania's economy.

President Biden's American Families Plan calls for universal preschool for all 3- and 4-year children and I urge you to prioritize a strong investment for these programs. Research shows low-income children who attend early education programs such as preschool and Pre-K do better in math and reading later in life. However, children of color and from low-income families often do not have access to high-quality early childhood education programs. Early childhood education programs also allow parents to participate in the workforce, which increases family earnings and helps the economy.

In addition to early learning, postsecondary education attainment is essential to the economic well-being of individuals, families, and communities. As we see the impact of the pandemic on the workforce, particularly among women and people of color, and as we observe changes in workforce needs going forward, completion of postsecondary credentials must be an area of focus. Investment in comprehensive approaches to support students in earning credentials also supports the businesses and industries across the state who are seeking qualified individuals to fill their workforce vacancies. The College Completion Fund in the American Families Plan would be a sound investment in Pennsylvania postsecondary education and the economic development of our communities.

Far too many people are unable to receive Home and Community Based Services care because of long waitlists and chronic underinvestment in care workers. In Pennsylvania, the pre-pandemic median wage for a direct care worker was just $11.99 per hour, and many have few or no benefits. Sixty-two percent of home care workers are people of color. Increased funding would provide states with enhanced Medicaid funding for home and community-bases services if they carry out certain activities that will support expanding access to these services and strengthen the workforce providing them. This funding would create jobs and help give seniors and those with disabilities the care they deserve.

Much like my budget plan for Pennsylvania this year, the budget reconciliation should make these crucial investments, and extend and expand tax cuts for low- and middle-income individuals and families by implementing tax reform to close existing loopholes and ensure that the wealthiest Americans pay their fair share.

Thank you for your consideration. If you have any questions, please contact my office.

Sincerely,

TOM WOLF
Governor

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