Keeping his election pledge, Governor Corbett has proposed a Pennsylvania budget for 2011-12 which would require no tax or fee increases. In fact, the Governor would actually provide some additional tax reductions for Pennsylvania’s business community. Whether these will hold up after debate by the General Assembly remains to be seen since closing a $4 billion structural deficit required the Governor to propose many spending reductions, some very drastic. Tax Highlights from the Governor’s Budget proposal:
• No severance tax on Natural Gas
• Maintain 100% Bonus Depreciation (see separate article)
• Maintain Capital Stock and Franchise Tax phase-out, reducing corporate taxes by $70 million in 2011-12 (elimination of the tax still scheduled for 2014)
• R&D Tax Credit - allocation increased from $18 million to $55 million
• Education Improvement Tax Credit (EITC) – allocation increased from $60 million to $75 million
• Job Creation Tax Credit – maintain current $10.1 million allocation
• Film Production Tax Credit – maintain $60 million allocation
• Neighborhood Assistance Tax Credit – allocation increased from $8.1 million to $18 million
• Coal Waste Removal and Ultra Clean Fuels Tax Credit – $18 million allocation
• Resource Enhancement and Protection Tax Credit - increased from $4.5 to $10 million
The Governor’s budget would reduce expenditures for general government operations by more than two percent and would eliminate 1,500 government positions. Many DCED programs, including economic development programs, would be consolidated and DCED’s budget would be reduced by $114 million. The Department of Revenue, however, fared quite well under the Governor’s budget, with an overall increase. It appears that the budget would maintain funding for badly-needed upgrades to the Department of Revenue’s technology.
Please see full publication below for more information.
