The Pennsylvania Chamber of Business and Industry stressed on Tuesday the urgent need for a plan to address the growing pension crisis that the state is facing, saying pension reform must be implemented prior to establishing new revenue sources for the commonwealth.
Gov. Tom Wolf recently proposed a plan that would increase general fund revenue for the 2015-16 fiscal year to almost $34 billion, which would be a 16 percent increase over the previous year. To fund the increased spending, Wolf is proposing increasing sales and personal income taxes as well as additional taxes levied on natural gas extraction and refinement.
“There should be no discussion of new revenue until we address Pennsylvania’s single-greatest financial threat – the $50 billion and growing public pension crisis,” Chamber President and CEO Gene Barr said. “Over the next three years, the state’s pension payment obligations will grow by more than $1 billion. The current system is clearly unsustainable – and will lead to increased tax burdens on the state’s residents and employers. Substantive, long-term reforms need to be enacted in order to protect the commonwealth’s economic stability and competitiveness."
The governor’s plan also includes changes to how C-corporate entities file taxes. Barr said this move would add unpredictability and increase filing burdens on job creators.
“As the governor himself has stated – Pennsylvania’s current CNI (Corporate Net Income) rate is ‘appalling’ and a definite deterrent to businesses that are looking to locate here,” Barr said. “We fully agree with the governor and commend him for addressing this issue in his first budget proposal. However, the governor is seeking to increase and expand many taxes that businesses pay. We have serious concerns on the breadth of this tax increase package. Businesses are finally recovering from the recession and unemployment is at a six year low. Increasing the cost of doing businesses for Pennsylvania’s job creators only stands to reverse the progress we’ve made in growing jobs and rebuilding our economy in recent years. The activities of the natural gas industry in particular has resulted in more than 240,000 jobs and generated more than $2.1 billion in tax revenue for the Commonwealth. We need to focus on developing infrastructure that will help get natural gas to market and foster investment in core and ancillary industries that will drive Pennsylvania’s economy forward.”
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