State Begins Fiscal Year with Enacted Budget

From PA Chamber of Business & Industry

For the second year in a row, the Commonwealth is starting the new fiscal year with a budget in place. Gov. Tom Wolf’s budget address in February set a bipartisan tone with a focus of working together to find common ground. With the exception of a few minor speed bumps in the final days of June, this year’s budget negotiation process was relatively smooth. Thanks in large part to strong revenue collections throughout the year, the governor and legislative leaders remained confident that an agreement could be reached prior to the June 30 Constitutional deadline.

The nearly $34 billion budget agreement includes increased spending for K-12 education, as well as more money for career and technical education, community colleges, PASSHE universities and the state’s non-preferred universities. It also includes a $25 million increase for the popular Education Improvement Tax Credit program – which the PA Chamber supports because it allows the state’s business community to support Pennsylvania students by giving them access to alternative educational opportunities. There are also funding increases for mental health services as well as agricultural programs.

A number of items that the PA Chamber had previously expressed concerns with were taken off the negotiating table early in the negotiation process – including a proposed minimum wage increase, as well as another attempt to put an additional tax on the natural gas industry. We have repeatedly warned lawmakers that government mandated wage increases have a negative impact on jobs. A recent Independent Fiscal Office report found that the administration’s proposal to increase the minimum wage to $12 an hour would lead to the loss of 34,000 jobs across the Commonwealth. Likewise, we continue to push back against efforts to enact a punitive severance tax because it will negatively impact the state’s business climate and send jobs and opportunities to other states in the shale play.

Following the passage of the budget, the PA Chamber issued a statement applauding lawmakers and the governor for getting the budget done on-time without any broad based tax increases. Additionally, we commended the administration and General Assembly for working across party lines to finalize a spending plan that responsibly puts additional surplus revenues in the Rainy Day Fund to help the state better withstand future economic downturns and makes smart investments in key education and workforce development priorities including the Educational Improvement Tax Credit program and Career and Technical Education.

At the same time, we are urging the Wolf administration and the General Assembly to build on the positive economic momentum the state is currently enjoying by enacting pro-growth policies. Tax reform on the federal level helped to jump-start the nation’s and Pennsylvania’s economies. Comprehensively addressing and streamlining Pennsylvania’s outdated Tax Code will help to further this economic growth. Likewise, we look forward to continued constructive dialogue on ways to address the jobs skills gap and the state’s workforce issues. Moving forward on these two initiatives – as well as reforming Pennsylvania’s burdensome regulatory environment – will send a strong message to job creators that Pennsylvania is open for business and a prime location for future investment.

We look forward to working with elected officials on these and other important policy issues that will help to foster economic growth in the Fiscal Ye