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   HARRISBURG (July 14, 2009) -- Representatives of Pennsylvania's leading business advocacy groups today criticized a $29.1 billion state budget plan offered by House Democratic leaders that would spend $3.6 billion more than was collected in taxes during the entire 2008-09 fiscal year.

   The National Federation of Independent Business/Pennsylvania, the Pennsylvania Business Council, the Pennsylvania Chamber of Business and Industry, and the Pennsylvania Manufacturers' Association warned that if lawmakers were unable to take control of state spending now, their inaction only would guarantee higher taxes in the years to come and make Pennsylvania even less attractive in the global competition for jobs.

   “The global recession is painful for everyone,” said Pennsylvania Business Council President & CEO David W. Patti, “but it will end and when it does, Pennsylvania cannot be less competitive than it was before. In a global economy, employers ‘comparison-shop’ and Pennsylvania is an expensive place to do business. It’s essential for Pennsylvania’s working families that we end the spend-and-tax spiral with this budget.”

   The spending proposal is predicated on a series of tax increases, including new taxes on health insurance premiums and retroactively raising the Capital Stock and Franchise Tax (CSFT). If adopted, the plan also would require additional broad-based tax increases on families and businesses to balance the proposal.

   "At a time when individuals are struggling just to keep their health insurance, lawmakers should be working on reforms that drive down costs instead of taxing Pennsylvanian’s access to care," said NFIB State Director Kevin Shivers. "Imposing new premium taxes only will make health insurance more expensive. In this recession, that could mean more Pennsylvania business owners choose to drop coverage for themselves and their workers in order to stay afloat."

   David N. Taylor, Executive Director of the Pennsylvania Manufacturers’ Association, said the proposal to retroactively raise the Capital Stock and Franchise Tax to 2.89 mills over the next three years would inflict at least $2 billion in additional taxes on Pennsylvania employers.

   “Pennsylvania is one of the only states in the nation to tax both business income and business assets,” said Taylor. “Because the CSFT is a tax on business assets, employers are forced to pay it even in times like these when they’re losing money. With all of the challenges facing employers in this recession, the CSFT phase-out is the last pro-growth element in the state budget and sacrificing it now will only delay Pennsylvania’s economic recovery.”

   In its 2009 “Rich States, Poor States” report, the American Legislative Exchange Council ranked Pennsylvania’s economic performance as 46th in the nation and Pennsylvania’s economic outlook as 42nd. From 2005 through 2008, Pennsylvania’s Gross Domestic Product grew at less than 3/4th of the national average.

   "Particularly now, Pennsylvania must take steps to spur business growth and job creation," said Gene Barr, vice president of government and public affairs for the PA Chamber. "Raising taxes is not the answer. Fiscal restraint and across-the-board sacrifices now will ultimately help better position the Commonwealth coming out of the recession and into the future."
   # # #

   Contacts:Kevin Shivers, State Director, NFIB, 717.571.0009
   David N. Taylor, Exec. Director, PA Manufacturers Association, 717.232.0737
   Gene Barr, Vice President, PA Chamber of Business and Industry, 717.720.5469
   David Patti, President, PA Business Council, 717.238.1764

   Posted 1 year ago #

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