Public Education
When he first took office, Governor Corbett walked into a public education funding gap. For over two years Pennsylvania’s school districts received a total of $1.7 billion in stimulus money. Over that same two-year period, public school employee salaries and benefits jumped by $1.3 billion.
Pensions
The unfunded liability for state employees and teacher pensions is $41 billion, and if something isn’t done soon we are on the hook for it. The Governor is offering a plan that will almost surely result in a tough political fight because part of it calls for adjusting the pension formulas of those currently employed. There may be no alternative. His budget office says that next fiscal year the costs for pensions will consume 60 percent of all new revenues, money that should be going to core government programs.
Business Taxes
Only two states, Pennsylvania and New Hampshire, cap the net operating losses (NOL) business can carry over against their Corporate Net Income (CNI) taxes. Here’s why the other 48 don’t. The cap penalizes start-up and cyclical companies by significantly increasing their effective tax rate. Allowing for the deduction in net operating losses improves a business’s tax liability. Not allowing for uncapped NOL deductions puts Pennsylvania at a direct disadvantage in attracting or retaining jobs in these innovative industries.
Health Care
Remarkably some have characterized the Medicaid expansion under the federal Affordable Care Act (ACA) as “free” for Pennsylvania because Washington “covers” the initial few years of cost. This, when the money to pay for the expansion still comes from the same pockets, ours, and the commonwealth will end up shouldering most of the costs in the down years anyway.
Transportation Funding
Our roads and bridges are not only costing us millions in delays and vehicle repairs but they are dangerous as well. Fifty years is the average age for a Pennsylvania bridge and PennDOT classifies more than 4000 bridges as structurally deficient. These deficiencies cause rerouting, shipping delays, and hazardous situations on a daily basis.
Restraint in Spending
The Governor’s budget builds on his first two spending plans that combined to erase a $4.2 billion deficit caused by the recession and the end of federal stimulus money. It hasn’t been easy or painless. According to his Budget Office, 260 line items in the annual budget have been eliminated since Governor Corbett took office.
Governor Corbett’s third budget proposal continues a restraint in pubic spending that over the past two years eliminated a $4.2 billion deficit without raising taxes.
“We stopped our fiscal cliff before it even had a name,” Governor Corbett said in his address before the General Assembly on February 5. “And we didn’t do it by raising taxes and increasing spending.”
The Pennsylvania Manufacturers’ Association announced its support for Governor Corbett’s 2013-14 budget.
“Governor Corbett’s budget plan sets the course for expanding Pennsylvania’s economic growth,” said PMA Executive Director David N. Taylor. “It continues his leadership of fiscal discipline and recognizes that private sector job growth is essential for the future prosperity of our commonwealth.”
The only things standing in the way of the private management of the Pennsylvania Lottery are reviews by the Attorney General, Treasurer, and Auditor General. They each have 30 days to review Governor Tom Corbett’s decision to hand the administration of the Lottery over to Camelot Global Services. Their review is limited to the scope of their offices.
“The Attorney General reviews it for its legality, the Treasurer on its financials,” said Jay Pagni, a spokesman for the Department of General Services. “None can review on policy.”
By: Dave Taylor, Executive Director, PMA
The Pennsylvania Manufacturers’ Association, and on behalf of Pennsylvania’s manufacturing employers, emphatically supports voluntary union membership and an end to coercive payments to unions in our commonwealth.