State Budget Reaction
March 23, 2011

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

On March 8, Governor Corbett unveiled his proposed state budget for the 2011-2012 fiscal year.  As expected, the governor called for across-the-board spending reductions as a way to rein in government spending that has grown faster than the economy and taxpayers’ ability to pay. The budget would restore spending to near pre-recession levels, but maintain vital human services, and protect public health and safety.

While many of these cuts demonstrate tough choices, the goal is that a budget that embraces fiscal discipline; limited and effective government; and private-sector job creation will lead to sustained economic growth.

The governor’s commitment to fostering job growth is evident in a number of areas, starting with a recent announcement that Pennsylvania would continue to permit businesses to write off capital expenses for machinery and equipment, consistent with the federal Tax Relief Act. Ignoring this would have discouraged businesses from investing assets in the Commonwealth.

In the state budget, the governor is calling for the continued phase-out of the Capital Stock and Franchise tax and an increase in the Research and Development tax credit.

The administration also proposes to consolidate dozens of programs within the Department of Community and Economic Development to target available resources in the most effective manner possible.

In addition, job creators welcome regulatory reforms that will address permit approval backlogs within various state agencies. In fact, DCED has been empowered to speed up any permit in any agency where the creation of jobs is at stake.

But perhaps the most eagerly anticipated news is the governor’s expressed commitment to lawsuit abuse reform, beginning with the governor’s specific ask to pass Fair Share legislation.

As the budget debate progresses, Pennsylvania Chamber members hope lawmakers keep in mind that this plan starts to focus real-world solutions on state government; puts the Commonwealth on the road to private-sector job creation that will solidify the fragile economic recovery; and opens the long-overdue dialogue about the proper role of state government.

Thank you for your support. And thank you for spending a minute of your time with the Pennsylvania Chamber – The Statewide Voice of Business.