Meet the PA Chamber’s Government Affairs Team Gene Barr president and CEO Sam Denisco vice president, Government Affairs Taxes, healthcare and tort Alex Halper director, Government Affairs Labor and employment, education, workforce and trade Jennifer Reis manager, Government Affairs Political Action Committee management, local chamber outreach, general business issues Kevin Sunday director, Government Affairs Energy, environment and transportation Fiscal Challenges Face Pennsylvania as 2017–18 Budget Process Begins Elected officials have their work cut out for them as they begin negotiations on the 2017- 18 state budget. With revenues continuing to come in below projections, the state is expected to face a $3 billion structural deficit going into the upcoming fiscal year. On top of that, the state’s Independent Fiscal Office is predicting a continuation of this slow growth pattern leading into the 2017-18 Fiscal Year. When combined with increasing annual mandated costs — most notably the growing pension crisis — this revenue shortfall has created yet another year of tough fiscal choices for Pennsylvania. In February, Gov. Tom Wolf outlined his proposed spending plan for the upcoming year — which included a two pronged approach to address the state’s fiscal woes. The administration is looking to increase state revenue by enacting more than $1 billion in new taxes on Pennsylvania employers. The proposed tax increases include: an expanded Insurance Premiums tax, expanding the state sales tax base to a range of currently exempt goods and services, enacting an additional 6.5 percent tax on the natural gas industry, capping Net Operating Losses at 30 percent and making several changes to the way that corporations file their taxes and calculate deductions. The PA Chamber has voiced concerns that these proposed changes to the Commonwealth’s tax structure would stifle job creation and hamper our ability to compete — which will only impede the state’s economic progress. The second part of the governor’s plan to address the growing deficit consists of various cost-saving measures that the administration is anticipating will result in a $2 billion net savings to the Commonwealth. These measures include consolidating up to four state agencies, downsizing state buildings and eliminating duplicative services. The fate of these proposals is still uncertain, as most will require action by the General Assembly. Some lawmakers have expressed skepticism about the Wolf administration’s projected savings. While these items will be debated over the coming weeks, the PA Chamber is encouraged to see elected officials looking at new and innovative ways to ensure that taxpayer dollars are used as effectively as possible. As the budget process moves forward, the PA Chamber will continue to urge our elected officials to enact a responsible budget that includes comprehensive pension reform. As the state’s No. 1 cost driver, the public pension crisis continues to eat away at the state’s General Fund budget — diverting more tax dollars away from other state programs. Reforming our current pension systems is a necessary step toward putting Pennsylvania on a path to financial stability and shifting the risk of further tax increases away from Pennsylvania residents and businesses. (Editor’s Note: The status of all bills in this Legislative Update is based on their respective standing as of March 24. For an update on these measures, please visit the PA Chamber website at www.pachamber.org.) Taxes Like-kind Exchanges (S.B. 201): This legislation would put the Commonwealth in line with every other state by allowing for “like-kind” exchanges for tax-deferral when property is exchanged with similar property. This change to the Commonwealth’s tax structure will remove a disadvantage Pennsylvania small businesses face when competing with businesses in other states. Status: The bill was approved by the Senate Finance Committee and is currently awaiting consideration by the full Senate. PA Chamber position: Support Small Business NOLs (S.B. 202): This legislation would expand the tax strategies available to small businesses, helping them to have more control over their financial positions and better compete. Small businesses, which are the backbone of the Commonwealth’s economy, don’t have access to the capital that larger companies have. This legislation would remove an unfair tax obstacle for small businesses by allowing them to deduct net losses from a subsequent tax year’s total state tax liability. Status: The bill was approved by the Senate Finance Committee and is currently awaiting consideration by the full Senate. PA Chamber position: Support Small Business Equipment Deductions (S.B. 203): Current Pennsylvania law limits the amount of Section 179 deductions for personal income tax purposes (S Corporations, partnerships, limited liability companies and individuals) to $25,000. This legislation would bring the Commonwealth in line with 33 other states that currently allow businesses to deduct the full purchase price of qualifying equipment purchased during the tax year to match the federal limit, which is $500,000 per year. Under this proposal, the deduction is phased out if the total amount of the equipment purchased is over $2 million. Status: The bill was approved by the Senate Finance Committee and is currently awaiting consideration by the full Senate. PA Chamber position: Support Education Educational Improvement Tax Credit Program (H.B. 250): The Educational Improvement Tax Credit program and the Opportunity Scholarship Tax Credit program enable the business community to support Pennsylvania families and children by giving them access to better educational opportunities. The PA Chamber supports any effort to help students from varying socio-economic backgrounds and the chance to earn a high quality education and become the next generation’s skilled and inspired workforce. This legislation would increase the amount of tax credits available under the EITC program by $50 million (to $175 million) and the amount of tax credits available under the OSTC program by $25 million. Status: The bill passed the House and is currently awaiting consideration by the Senate Education Committee. PA Chamber position: Support Labor Mandatory Leave Policies (S.B. 128): A growing national trend finds local governments attempting to impose their own leave requirements on employers. Last February, the city of Philadelphia approved a mandated leave policy for businesses with 10 or more employees, and the city of Pittsburgh passed a similar policy for all employers in the city that was later struck down in Allegheny County court. The PA Chamber opposes mandatory leave policies and supports efforts to prohibit a local government from imposing leave mandates beyond what is required by state or federal law. Status: The bill passed the Senate Local Government Committee and is currently awaiting consideration by the full Senate. PA Chamber position: Support Legal Reform Anti-SLAPP Legislation (S.B. 95): This legislation would provide for a legal motion to dismiss a Strategic Lawsuit Against Public Participation (SLAPP) suit. A SLAPP suit purports to protect first amendment rights against a lawsuit aimed at protecting a company’s interest. Status: The bill passed the Senate Judiciary Committee and is currently awaiting consideration by the full Senate. PA Chamber position: Oppose General REAL ID Repeal (S.B. 133): Currently, Pennsylvania is one of only six states noncompliant with the federal REAL ID Act. The REAL ID Act requires states to adopt and institute 38 specific standards to come into compliance. Pennsylvania currently meets 32 of these standards. If the Commonwealth fails to come into compliance with the REAL ID Act, federal agencies will be prohibited from accepting Pennsylvania driver’s licenses and identification cards; additionally, Pennsylvanians over the age of 18 will need a passport to travel on any commercial airplane. This legislation will repeal Act 38 of 2012, require PennDOT to apply to the U. S. Department of Homeland Security for a deadline extension and move Pennsylvania into compliance with the Act. Status: The bill passed the Senate Communications and Technology Committee and is currently awaiting consideration by the Senate Appropriations Committee. PA Chamber position: Support
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