In a close 26-24 vote held July 27, the state Senate narrowly passed a revenue package that will significantly increase the cost of doing business in the Commonwealth.
House Bill 542, the Tax Code bill, contains $600 million in tax increases on Pennsylvania residents and job creators. The Senate’s revenue proposal includes: a new tax on residential and commercial use of natural gas; an increase to residential and commercial electric bills; a higher tax on phone bills; as well as a severance tax on the natural gas industry. In addition to these tax increases, the Senate’s plan calls for borrowing $1.3 billion against the state’s Tobacco Settlement Fund; $200 million in special fund transfers and $200 million from a yet-to-be enacted gaming expansion bill in order to balance the 2017-18 budget.
Prior to the vote on final passage, the PA Chamber sent a memo to the entire Senate, raising concerns with the impact the new and increased taxes will have on Pennsylvania’s economy and urging Senators to oppose the bill. In a statement released following the vote, PA Chamber President Gene Barr said: “We’re disappointed that the Senate has voted in favor of a $600 million tax increase that will hurt Pennsylvania’s ability to compete and will increase job creators’ operating costs for electricity, natural gas and communications services. At a time when the state’s unemployment rate has consistently been above the national average, proposals like H.B. 542 – which will make Pennsylvania’s business climate more burdensome – will only further weaken the state’s economic growth.”
While the proposal is supported by the Wolf administration, its fate in the House is uncertain. The PA Chamber is encouraging businesses to urge the House of Representatives to oppose this bill. Contact information is available on the Columbia Montour Chamber’s website.