Hi, I’m Gene Barr, president of the Pennsylvania Chamber.
Welcome to this month’s Pennsylvania Chamber Minute.
After months of disagreement among legislative leaders and the Wolf administration on how the state should pay for the $32 billion state budget that became law in July, I’m pleased to share that the 2017-18 budget impasse has finally reached its end. In the final days of October, Governor Tom Wolf signed a number of bills into law that helped to close a spending gap for the current fiscal year and determined other revenue sources to balance the budget.
The final deal relies heavily on borrowing $1.5 billion from the Tobacco Settlement Fund. Also included is a reform that eluded lawmakers last year – a gaming expansion bill – which legalizes iGaming; creates 10 satellite slot machine locations (the permits for which will be sold at a future auction); allows video game terminals at truck stops and regulates fantasy sports betting. All told, these gaming reforms are expected to generate $239 million in the current budget year and $100 million in recurring revenue in future budget years. The budget also includes $500 million in one-time fund transfers; a fireworks tax; and requiring online vendors to remit sales tax.
Notably absent are a number of proposed tax increases that the PA Chamber worked to defeat during the months-long budget negotiation process: an additional tax on natural gas drillers; new taxes on commercial and residential gas users, increased taxes on electric and phone bills; a new hotel tax; and a commercial warehouse storage tax. The PA Chamber opposed these taxes on the grounds that they would have singled out individual industries to close a revenue gap, which negatively impacts economic growth and makes the Commonwealth less competitive.
Despite the governor’s action on many of these bills, it ended up that the legislation that finally put the budget to bed became law without his signature. The Education Code bill contains several provisions that the PA Chamber supports – it increases funding to the Educational Improvement Tax Credit program by $10 million; and also replaces the ineffective “last in, first out” system used when teacher furloughs are necessary to one that incorporates teacher performance. The PA Chamber had long advocated for this reform because it will help to improve the quality of education for current and future generations of students who will benefit from having the best, most qualified and inspiring teachers in the classroom.
Thanks for spending a minute of your time with the Pennsylvania Chamber, the Statewide Voice of Business.