Many cops, teachers, nurses won't get full $2,500 tax break
With his budget proposal under consideration by lawmakers, Gov. Josh Shapiro has toured the state to tout a financial incentive that he hopes will attract more people into Pennsylvania's ranks of police officers, nurses and teachers, although many new recruits may not fully receive it because of how much they earn.
The shortages of police officers, nurses and teachers are nationwide, and Shapiro earlier this month proposed the three-year tax credit of up to $2,500 a year for new recruits, a central plank in his effort to address the shortages in Pennsylvania.
His office bills it as his "plans to Rebuild Pennsylvania's Workforce."
In a news conference at the Mercyhurst Municipal Police Academy in Erie last Thursday, Shapiro described seeing 30 children in classrooms in Pittsburgh because of a lack of teachers. It's hard for kids to learn and teachers to teach in that environment, he said.
"So we've got to mitigate that, and one of the ways we do that is by encouraging more people to come into teaching," Shapiro said. "I think this tax credit is a way to do that."
However, the size of a tax credit depends on how much a newly certified officer, nurse or teacher pays in state income tax, and many of them likely pay well below $2,500.
For instance, someone with a starting salary of $50,000 a year would pay about $1,535 in state income tax at the tax rate of 3.07%.
To get the full $2,500 tax credit, a worker would have to make almost $82,000 — far above the starting salaries of the vast majority of nurses, teachers and officers.
Further, they may not work a full year the first year they are eligible — thus reducing the benefit in their first year.
For instance, students hoping to become teachers typically complete their bachelor's degree in May and start a teaching job when the school year begins in August or September.
To take effect, the tax credit requires approval from the Legislature. The administration estimates it at a roughly $25 million cost, barely a footnote in Shapiro's $44.4 billion budget proposal for the 2023-24 fiscal year starting July 1.
Under the proposal, the tax credit would apply to new professional certifications issued starting in 2023, and it could be included on a newly certified worker's tax return starting in 2024.
Those eligible could receive the tax credit each year for the first three years after they get a certification, or after they move to Pennsylvania with a state-recognized credential, administration officials said.
The proposal comes as governors are proposing to raise teacher pay, police departments are offering signing bonuses and other incentives, and hospitals are paying a premium for nurses.
Many say Shapiro's proposal can help.
"Anything will help, right?" said Joe Regan, president of the Fraternal Order of Police's Pennsylvania state lodge. "Whatever it takes to get us to get our people in is helpful. Will they stay? That's the next question."
That said, law enforcement, health care and education groups say systemic changes are necessary, such as making it easier, less time-consuming and cheaper to become a teacher or a nurse.
The Pennsylvania State Education Association, the state's largest teachers' union, said Shapiro's heart is in the right place, but it doesn't expect a tax credit will have much impact on someone's decision to become a teacher.
Rather, it wants the state to put up the estimated $178 million it would take to provide a $60,000 minimum salary for teachers, up from what it estimates is a $47,500 average starting salary for teachers in Pennsylvania.
Starting salaries for nurses averaged about $57,600 in 2021, according to state data, the most recent available.
SEIU Healthcare Pennsylvania, a labor union that represents almost 10,000 nurses around the state, said $27 an hour is the low end for starting nurse salaries currently. That comes out to about $56,000 a year for a 40-hour work week, although the union said starting salaries vary by region, employer and other aspects, and some nurses work more than 40 hours in a week.
Police departments advertising open jobs are promising starting salaries across a wide range, including $20 an hour for a part-time officer to full-time starting salaries in the $40,000s to above $80,000.
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