Will There Be New Cuts in PA House Budget Bill?

Pennsylvania House leaders plan to introduce a 2013-14 budget bill on May 28, with a vote to follow the week of June 10.

Balancing the budget without new deep spending cuts will be difficult, as lawmakers have to make up for a $518 million shortfall projected by the Independent Fiscal Office. The task will be more complicated as House Appropriations Chairman Bill Adolph announced the bill will NOT include $177 million in savings from changes to the state's public pension systems proposed by Governor Corbett in his February budget.

To help close the budget gap, some lawmakers — and even the Corbett administration — are considering a delay in the phaseout of a corporate tax that has already been cut by 85%.

The capital stock and franchise tax, now at a record low rate, is scheduled to be completely eliminated in 2014. Lawmakers could freeze the rate at 2012 levels, raising an estimated $390 million more to help prevent a new round of cuts and preserve the modest spending increases proposed by the Governor in February. Just this week, Budget Secretary Charles Zogby told The Philadelphia Inquirer: "I think whether we can afford to continue the phaseout is something we're going to have to examine." 

After two years of deep cuts, Pennsylvania cannot slash more funding to schools, health care, mental health services and other critical investments in our future. Delaying the phaseout of this very low tax is the fiscally responsible thing to do. The Legislature has delayed the phaseout in five of the last 15 years, during times the economy lagged. It will have little impact on most businesses that will continue to get all the other tax cuts that have been enacted over the past decade.

As we move into the final weeks of the budget process, all of us should do our part to ensure our communities are strong and Pennsylvania is moving forward.


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