Harrisburg, Pa. (WENY)-- In laying out his 2021 legislative agenda, Pennsylvania Governor Tom Wolf made it clear he wants lawmakers to pass legislation that would raise the state’s minimum wage. It hasn’t been increased in more than ten years. But the Pennsylvania Chamber of Business and Industry is speaking out against that proposal.

In this year’s budget address, Governor Tom Wolf will propose raising Pennsylvania's minimum wage to $12 dollars-an-hour by July 1st. The plan would include annual increases of 50 cents until it reaches $15 dollars-an-hour by July 2027.

“We need to raise the minimum wage so that every Pennsylvanian who works a full-time job can afford the basic necessities like food, and medicine, and shelter,” says Governor Wolf.

But Pennsylvania Chamber of Business and Industry President and CEO Gene Barr says if passed, that minimum wage hike will produce negative results.

“Raising that wage to those levels will cost jobs. I’ve talked to my members who have said unfortunately, they will be forced to lay off if that's the case,” Barr explains.

Barr points to the glaring issue of the pandemic as a reason why now is not the time to raise the minimum wage, at least not by how much the Governor is proposing. He argues it would increase business operating costs, a move that would take PA Chamber members in the wrong direction after being impacted by COVID-19 mitigation orders.

“With businesses trying to come out of months, and months, and months of being shut down, of literally being closed, having no revenue, or having tremendously reduced revenue, to come out of that and have state government say ‘if you make it out of this, we’re going to greatly increase your costs, just letting you know.’ That’s a horrible signal to send,” says Barr.

During his budget address, Governor Wolf will also propose raising the state’s Personal Income Tax rate while at the same time expanding the tax exemption for lower-income families. According to the Governor’s office, 67% of families would see a tax cut or see their taxes stay the same. It’s in an effort to raise more money to help bolster Pennsylvania’s education system.

“We’re going to stop asking working families to pay the same tax rate my family does. I want to help working families get ahead by reducing their taxes. If you’re married with two kids, and you earn less than 84,000 dollars a year, I suggest we give you a tax cut,” says Governor Wolf.

But like the Governor’s minimum wage proposal, the PA Chamber is against this proposal as well. Barr argues that an increase to the state’s Personal Income Tax is a tax increase on small businesses.

“We cannot burden these businesses with doubling of the minimum wage, with tremendously higher personal income tax, because that's a business tax on small business,” says Barr. “Personal income tax increases, in reality, are also business tax increases. These are things that are not going to help our recovery.”

The Governor and PA Chamber do agree on certain items, for example: investing in workforce development, reducing barriers to employment, and criminal justice reform measures. But Barr says none of these will help if members are facing higher operating costs.

"Our members want to work on all of these, but again it makes it really difficult if businesses are struggling with significant cost increases that are being placed on them by state Government,” says Barr.

Governor Wolf will release his budget address at 11:30 on Wednesday morning. Like many traditions over the past year, this one is also impacted by the pandemic. Instead of speaking in person in front of the entire General Assembly, Governor Wolf will deliver his address in a pre-recorded video.