Educational Tax Credit Program Expanded

As part of the final budget legislation passed last week, House Bill 1606 increases the amount of tax credits available in the Educational Improvement Tax Credit (EITC) program by $25 million, providing a total of $175 million in both the EITC and Opportunity Scholarship Tax Credit (OSTC) programs. The EITC program provides tax credits to businesses which make contributions to scholarship organizations (SOs) offering scholarships to children in kindergarten through grade 12, educational improvement organizations (EIOs) providing funding for innovative educational programs in public schools, and pre-kindergarten scholarship organizations (PKSOs) offering scholarships to children enrolled in pre-kindergarten programs.

The Chamber’s Foundation has utilized tax credits from local employers to fund scholarships to Pennsylvania Free Enterprise Week, the Tech Theatre program in local high schools, and other programs. Local early child development programs and private schools have also received funding from participating businesses. The new tax credits are allocated in the same proportions as outlined in the previous law. Scholarship organization credits increase by $15 million to $75 million.  Educational improvement organization credits increase by $7.5 million to $37.5 million. Pre-kindergarten scholarship organization credits increase by $2.5 million to $12.5 million. The OSTC program, which was established in 2012 based on the model of the EITC program, provides tax credits to businesses which make contributions to opportunity scholarship organizations (OSOs) offering scholarships to children in kindergarten through grade 12 who reside within the attendance boundaries of “low-achieving schools” (those schools in the lowest 15 percent of their designation as an elementary or secondary school).

The OSTC program also directs scholarships toward low-income families by requiring OSOs to give preference to applicants whose household income is within 185 percent of the federal poverty level.   Additional information on these programs is available on the PA Department of Community and Economic Development’s website.

General Appropriations Bill Becomes Law

From PA Chamber of Business & Industry

Last Sunday, Gov. Tom Wolf had a press conference announcing that he was going to let the General Appropriations bill that the General Assembly had sent him on June 30 become law without his signature. While Act 16A of 2016 was officially enacted at midnight on July 12, what had yet to be resolved was a plan on how to pay for all of it.   This was the goal of lawmakers in the days that followed. By the early evening on Wednesday, July 13, the House voted 116-75 and the Senate voted 28-22 in favor of a conference committee report on H.B. 1198, the Tax Code Bill that enacted new revenue-generators to fund additional spending for the 2016-17 Fiscal Year. Shortly after the legislation made its way to the governor’s desk, he promptly signed it into law, saying in a statement: “Today’s passage of a revenue package means that we avoid another lengthy impasse, our budget is balanced this year, and we have greatly reduced the commonwealth’s structural budget deficit.”

Following the governor’s action, the PA Chamber issued a statement expressing concern that increased spending was agreed to before the enactment of public pension reform legislation, which remains the state’s No. 1 cost-driver. PA Chamber President Gene Barr also voiced apprehension about the decision to cap the vendor’s allowance, which helps retailers recoup the costs associated with collecting the sales tax on behalf of the state.  The statement also spoke to several matters related to education policy.   “While we applaud the expansion of the Educational Improvement Tax Credit program, additional education reforms need to be part of the conversation – including changes to the ineffective “last in, first out” teacher seniority rules and measures that aim to offer every child a high quality education,” PA Chamber President Gene Barr stated. “We urge lawmakers to tackle these critical issues when they return to session in the fall and finalize a long-term, comprehensive pension reform plan that shifts a substantial amount of the risk of increasing pension obligations away from Pennsylvania taxpayers.”

House and Senate lawmakers are scheduled to remain in their districts for the remainder of the summer, with the House scheduled to reconvene on Monday, Sept. 19 and the Senate on Monday, Sept. 26.

Budget Bill Heads to Governor’s Desk Absent Revenue Package

Last week, in the days leading up to the end of the 2015-16 Fiscal Year, the House and Senate engaged in a back-and-forth with S.B. 1073 – the General Fund budget bill. First, the House voted 132-68 on a $31.55 billion spending plan that represented a 4.8 percent increase in spending, which House Republicans proposed be funded through a combination of higher tobacco taxes, a tax amnesty program, gambling expansion and revenues through the new liquor reform law.

When the Senate received the bill, amendments were adopted before they passed the legislation 47-3. The amended bill appeared to spend $20 million less than the House-passed version while increasing higher education funding by $39 million, or 2.5 percent (the House plan level-funded higher education for the upcoming Fiscal Year). The Senate accomplished this by moving $95 million for the Commonwealth Financing Authority out of the General Fund into a restricted account, which is why the total spending figure appeared reduced. On Thursday, June 30 – the last day of the 2015-16 Fiscal Year – the Senate-amended version of S.B. 1073 was passed on concurrence by the House and sent to Gov. Tom Wolf, who applauded lawmakers for coalescing around a budget agreement and said he would sign the legislation once an agreement over revenue was reached.

Notably, the House and Senate votes on the budget bill this year earned strong bipartisan support. The bill substantially increases funding for basic education (a priority for the Wolf administration) with a $200 million increase, to a record $5.985 billion; and authorizes $15 million for the governor’s initiative to address the Commonwealth’s heroin and opioid addiction crisis.

However, to date, there has yet to be a final agreement on the revenue package to pay for this increase in spending. While a sales or Personal Income Tax increases appear to be off the table (increases to both were originally proposed in the budget plan Gov. Wolf put forth in February), a number of other revenue enhancers are being discussed. The House and Senate both stand in recess and are on a six-hour call of the Chair. They are expected to reconvene when a revenue agreement is imminent.

Dividend Declared for Chamber Business Insurance Program

Penn National Insurance has announced a one percent dividend for the fourth program year of the ChamberChoice Business Insurance program. Members who placed their insurance coverage with the program during the 2014/2015 program year will receive a dividend equal to one percent of their total premium. Over the past four years, Penn National Insurance has returned an average of 7% in dividends. In the four years of its existence, the program has returned over $132,000 to participating local member businesses of the Chamber.

An important aspect of this group insurance program is preventing loss and controlling claims costs. Because dividends are based on the group’s collective loss experience, a business that may have had a significant loss may still be eligible to receive a dividend.  The program is sold exclusively through local, independent agents who can offer Chamber members a variety of coverages and pricing on property and casualty insurance, including business owners, commercial auto, general liability, inland marine and workers’ compensation. Dividends are paid on all of these coverages. In addition, through safety consulting, Penn National Insurance and local independent insurance agencies encourage member businesses to develop safety practices to substantially reduce or eliminate workplace injuries.

The Business Insurance program is just one of many benefits of Chamber membership. For more information about this year’s dividend, contact Fred Gaffney at fgaffney@cmpartnership.org.  To sign up for the program, call the Chamber at 570-784-2522.

Welcome the Chamber’s Newest Members

More than 600 businesses and organizations belong to the Columbia Montour Chamber to receive benefits and support efforts to strengthen our region. Increased membership allows us to offer additional programs and benefits, have a stronger voice in advocacy, and be involved in more activities and initiatives in our communities. The Chamber welcomes four organizations that joined in June to help us fulfill our mission:

2 Twisted Sisters – 518 B Walnut Street, Danville

Berwick Area Boat Club #454 – P.O. Box 94, Mifflinville

DRIVE – Driving Real Innovation for a Vibrant Economy – 114 Woodbine Lane, Suite 103, Danville

Prenault Corporation – 152 Franklin Avenue, Suite 200, Kent, OH

Additional contact information is available on the Chamber’s Online Directory.

A reminder that anyone who recommends Chamber membership will receive a $25 gift certificate when that organization joins.