PA Budget Concerns
June 24, 2009

Hi, I’m Gene Barr, vice president of the Pennsylvania Chamber. Welcome to this month’s Pennsylvania Chamber Minute.

State lawmakers face a tremendous challenge in crafting a budget for the new fiscal year. The economy continues to struggle, and Pennsylvania’s revenue deficit now approaches a staggering $3 billion dollars.

Recognizing the monumental task at hand, our message to lawmakers is this:

First:

Demonstrate fiscal restraint.

The Chamber applauds pro-business lawmakers in the Senate for offering a budget that spends significantly less than what is proposed by the governor, and contains no tax increases.

In an economy in which higher taxes will hamper recovery, everyone has to be willing to make sacrifices.

Second:

Look beyond the 2009-2010 fiscal year.

Pennsylvania’s financial problems are not expected to end when the ink dries on the new budget. The next few years could be tough as well.

Add to that a looming funding crisis for the state’s two public pension systems and the solvency concerns facing the Unemployment Compensation Trust Fund, and we have a recipe for disaster if smart legislation is not part of the equation.

Third:

Use federal stimulus dollars responsibly.

The Senate’s budget wisely calls for using these dollars to supplement existing state programs, not to create new ones. This is critical, because once the federal money runs out, it will be taxpayers who will be paying for any new programs.

Finally:

Position the Commonwealth for economic recovery.

Despite many positive attributes, Pennsylvania lags in economic competitiveness.

Decisions must be made that will help put the Commonwealth in better standing coming out of the recession than before the economic downturn.

Unfortunately, some lawmakers are taking the opposite approach by considering business tax reporting changes that would harm business development while offering no guarantee of more revenue for the state. Tax increases are also being discussed, which would hit businesses and individuals at the worst possible time.

These choices will make recovery more difficult.

Nearly all businesses agree that better solutions to help Pennsylvania are eliminating the restrictive cap on net operating losses, and no longer penalizing companies for hiring workers and investing in their operations.

The challenge is great.

Much is at stake in the decisions lawmakers make in the coming days.

The Pennsylvania Chamber is working closely with legislators, ensuring that our members’ message is heard.

Thank you for your continued support and for sharing a minute of your time with the Pennsylvania Chamber—the statewide voice of business.