Budget Proposal Doesn’t Offer Real Solutions for Pension Crisis
From PA Chamber of Business & Industry
Last Tuesday, March 3, Gov. Tom Wolf gave his first budget address before a joint session of the General Assembly. The plan calls for nearly $34 billion in total spending for the 2015-16 fiscal year, an increase of 16 percent over the current year’s spending.
Most concerning to the PA Chamber is that the budget plan fails to offer any real solutions for addressing a $50 billion and growing pension crisis that will place enormous financial burdens on every Pennsylvania taxpayer if nothing is done. In a press release issued the same day as the budget address, PA Chamber President Gene Barr warned that pension obligations will grow by $1 billion over the next three years alone and stressed the urgency for substantive pension reform in order to protect the Commonwealth’s economic stability and competitiveness.
In order to fund billions in additional spending, Governor Wolf is calling for increases in many employer taxes – including increases in the sales and personal income tax rates and expanding the sales tax base to many additional goods and all professional services. And while the PA Chamber applauds the governor’s efforts to reduce Pennsylvania’s Corporate Net Income Tax rate – which at 9.99 percent is the highest in the nation – there are concerns about his call to institute unitary combined reporting which would create a more confusing, unpredictable and costly tax climate for job creators.
Lastly, the PA Chamber has already voiced opposition to Governor Wolf’s plan to institute another tax on the natural gas industry. Replacing the current impact tax with the governor’s proposed five percent severance tax would take money that’s currently being directed to local communities and put it into the General Fund for Harrisburg to spend. Furthermore, a higher tax on Pennsylvania’s fastest-growing industry would have a direct negative impact on core and ancillary jobs and would harm our state’s competitive advantage in the shale play.
The Columbia Montour Chamber will be working closely with the PA Chamber to address concerns with the Governor’s proposals and is also attempting to schedule a local budget briefing with a representative of the Wolf Administration for members.