The tax code bill enacted along with the 2013-14 state budget maintained Pennsylvania's capital stock and franchise tax, which was set to expire in 2014, for two more years. It also took a small, first step to close the Delaware loophole, which has allowed large multi-state corporations to avoid paying income taxes in Pennsylvania. No tax code bill was passed as part of the 2014-15 budget.
HARRISBURG, PA (Dec. 9, 2014) – A severance tax on natural gas, which every other major gas-producing state already has in place, will generate significantly more revenue for Pennsylvania than the current impact fee, even at lower gas prices.
Budget Secretary Charles Zogby confirmed during his final mid-year budget briefing that Pennsylvania will face a $2 billion budget gap next year. After balancing the 2014-15 spending plan with one-time resources, Secretary Zogby acknowledged that crafting a 2015-16 budget will be difficult for the next administration. This sentiment echoes what the Independent Fiscal Office (IFO), bond-rating agencies, and others (including we here at PBPC) have been saying for months.
Today’s mid-year budget briefing by Budget Secretary Zogby confirms the warnings issued by the Independent Fiscal Office and the independent ratings agencies about Pennsylvania’s dire financial condition. The Commonwealth can no longer rely on one-time fixes to balance its budget. We need long-term solutions that will restore fiscal stability and allow the Commonwealth to grow.
“The Independent Fiscal Office today warned of a significant and growing budget shortfall that must be addressed by the Governor and General Assembly as a first order of business in 2015. That yearly shortfall is expected to grow from $1.85 billion next year to nearly $2.6 billion by fiscal year 2019-20. The IFO attributes this large gap next year to one-time revenues and expenditure shifts used to balance the current year budget that will not be available in 2015-16."
Conventional wisdom may hold that Gov. Corbett fell short in his reelection bid because voters, and his own party leaders, didn’t much like him.Some pundits will say he didn’t do a good job selling his ideas.The fault lies not in his personality, nor his communications, but in the policies the governor pursued.
On Tuesday Pennsylvanians sent a clear message that education matters to them, and they endorsed a severance tax as a way to pay for it.
Working families in Pennsylvania pay a far higher share of their income in state and local taxes than the state’s wealthiest earners. And – thanks to corporate tax loopholes, the phase out of the capital stock and franchise tax, and other tax breaks – taxes collected from corporations in Pennsylvania have declined as a share of total tax revenue over the past 30 years … and the share coming from individual taxpayers has increased.