Chamber Calls for Long-Term Budget Solutions

Once again, Pennsylvania’s budget remains unfinished months into the state’s fiscal year. In recent weeks, proposals to bridge the revenue gap have included targeted taxes and one-time revenue infusions. Earlier this month, the Chamber’s Board of Directors sent the following letter to Representatives Kurt Masser and David Millard asking for a commitment to bring stability to the budget process.

“Well into the fourth month of the fiscal year, the state budget is not finalized as the House and Senate have not agreed on a revenue plan. A prolonged budget process has become a trend in recent years, which is damaging to Pennsylvania, its citizens, and businesses. The Chamber’s Board of Directors is asking you and your colleagues to commit now to implementing long-term solutions to the budget issues so that this trend does not continue.

We recognize that public pension obligations are significant cost drivers and acknowledge that additional revenue is necessary. Recent strategies for generating this revenue have included one-time fixes, borrowing, and taxes on specific industries such as the Marcellus Shale Gas industry, hotels, and warehousing. These strategies have obviously not brought stability to the budget process. While no one is in favor of higher taxes, now is the time to implement revenue strategies that spread the burden across as much of the tax base as possible, such as modest increases in the sales tax and/or Personal Income Tax rates.

As we have seen in the past, the budget impasse has real negative impacts. Pennsylvania’s credit rating has again been downgraded, state agency programs are on hold, and citizens that rely on state-assistance programs such as child care and college tuition are facing uncertainty and additional burden. The Legislature’s schedule throughout the budget process does not convey a sense of urgency to stakeholders. Until the budget is resolved, we urge you and your colleagues in both the House and Senate to remain in Harrisburg until the budget is finalized.

The current and future health of Pennsylvania is dependent upon your leadership in resolving the budget issues. Thank you in advance for committing to bring stability to this process.”