PA Chamber Budget Reaction

Thursday, July 1, 2010

PA Chamber: holding the line on taxes will help recovery, job growth

HARRISBURG, PA – The Pennsylvania Chamber of Business and Industry thanked lawmakers for holding the line on taxes and said that while not perfect, the newly enacted 2010-11 state budget adequately begins to reflect the economic realities of the times.

"The Commonwealth faces some sobering fiscal challenges, many which still require attention," PA Chamber Vice President Gene Barr said. "Our members recognize the difficult decisions elected officials needed to make in crafting this budget. Facing repeated cries from some groups to spend more and raise taxes, it’s reassuring that a majority of lawmakers knew that placing that burden on the backs of business at a time when economic concerns persist and job creation remains sluggish would only make things worse."

The budget does not include a new tax on smokeless tobacco and cigars; keeps the sales tax vendor collection allowance in place; and rejects calls for combined reporting – all issues that remained in play late in the negotiations.

The PA Chamber strongly opposed combined reporting, which would have harmed many businesses while not guaranteeing additional revenue for the Commonwealth, and fought successfully against an onslaught of misinformation about the issue and the business community’s revenue contributions to state coffers in general.

One tax not included in the new budget but still on the table is a proposed natural gas severance tax. According to the budget agreement reached between the governor and leaders of the four legislative caucuses, lawmakers face an Oct. 1 deadline to pass a severance tax bill, the details of which have yet to be ironed out.

PA Chamber members are urging lawmakers to carefully and responsibly consider the severance tax to ensure that Pennsylvania doesn’t hamstring the Marcellus Shale industry and hinder the tremendous economic benefits the industry is already bringing and can continue to bring to Pennsylvania. (The only two Pennsylvania counties – Bradford and Tioga – that lowered their unemployment rate over the past 12 months are counties in which Marcellus Shale drilling is occurring.)



Barr said despite the welcome news that the budget does not increase taxes, concerns remain, including a potential $850 million funding gap if Congress fails to approve FMAP welfare funding. The budget assumes approval of those dollars. More cuts would be necessary if the funding is not approved.

"The bottom line is that government has to live within its means just like individuals and families have had to do," Barr said. "That’s not always easy. In fact, it can be quite painful. But in these economic times, it can’t continue to be business as usual where taxpayer dollars are concerned. "


The Pennsylvania Chamber of Business and Industry is the state’s largest broad-based business advocacy association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of Business™.