Raising money by levying a new consumption tax on cigars and smokeless tobacco, along with modernizing the state’s liquor store system, could provide Pennsylvania with an additional $80 million to assist college students from low- and middle-income families, according to Kathleen McGinty, a Democratic gubernatorial candidate and former secretary of the state Department of Environmental Protection.
McGinty unveiled her proposal, called the College Affordability Plan, when talking to students in the University of Pittsburgh at Johnstown’s Biddle Hall on Tuesday morning.
She would create the Middle Income Opportunity Grant Program, which would increase aid to students from families with annual incomes up to $110,000. As many as 35,000 students could receive funding through the plan.
Her Pennsylvania Dream Scholarship Program would provide assistance to high-achieving students from low-income families. Dream money could be made available to 10,000 students.
McGinty believes half of the overall cost could be covered by taxing cigars and smokeless tobacco. Pennsylvania is the only state without some kind of tax on non-cigarette tobacco products. The other $40 million could come from projected increased sales realized by modernizing the state liquor store system: extending hours, improving direct marketing, enhancing enforcement, increasing penalties and opening new locations.
“If you’re serious about something as a politician, one of the litmus tests as to whether you’re serious is whether you’re willing to stand up and say, ‘This is how I would pay for it.’ A lot of people are like ‘two chickens in every pot and five SUVs in every driveway.’ How are you going to pay for that?
“I’m going to pay for this two ways,” McGinty said.
A third point of her plan would require that at least half of any increase in direct support for public higher education be linked to a provision prohibiting the receiving institution from increasing tuition and fees by more than the inflation rate.
“You’ve got to keep those costs under control because those costs have been skyrocketing year after year, way more than the cost of inflation,” McGinty said.
The Dream program would offer merit-based awards of up to $4,000 to help students attend colleges and technical schools in Pennsylvania.
McGinty’s plan also would supplement the state’s current grant program for middle-income families. Qualifying students could receive an additional $5,000.
“A lot of people say, ‘well jeez, we’re not in poverty as a family, but we seem to fall in the middle, and we lose out in terms of support even though these things are really tough when you’re raising two kids’ or four kids or whatever,” McGinty said.
She also would increase public education funding with money from several revenue streams, such as new volume- and market-based severance taxes on the natural gas industry.
Pennsylvania recently cut education spending by about $1 billion for several reasons, including the expiration of funding from the federal stimulus package.
McGinty holds Republican Gov. Tom Corbett responsible for the reductions.
“I would dedicate every dollar of the shale gas tax to restoring those cuts for K through 12,” McGinty said.
Dave Sutor is a reporter for The Tribune-Democrat. Follow him on Twitter at twitter.com/Dave_Sutor.