Pennsylvania’s budget for the next 12 months reflects Gov. Corbett’s avowed commitment to bring more jobs to the state and gives business plenty of reason to be pleased.
“The goal is to transition Pennsylvania … to grow jobs … to usher in a new industrial revolution in Pennsylvania,” Corbett said Saturday after signing the $27.66 billion spending plan, which includes more than $300 million in business tax breaks.
The Pennsylvania Chamber of Business and Industry applauded the budget.
“We are encouraged that elected officials are mindful both of the need for continued fiscal restraint in government spending and the need to foster private-sector job creation and sustainable economic growth,” Chamber president Gene Barr said.
The biggest short-term benefit to business is the continued phase-out of a levy that industry reviles as double taxation because it is based partly on profits that have been taxed in previous years.
Trimming that so-called corporate stock and franchise tax will save businesses $288 million, said Steve Miskin, spokesman for House Majority Leader Mike Turzai of Allegheny County. From July through May the state had collected $706.8 million from the tax, a 4.9 percent increase over the previous year.
The business tax break that got the most attention during budget negotiations and is key to Corbett’s dreams of a “new industrial revolution” was a credit for Shell Chemical L.P. to build a plant to process by-products of natural gas from the Marcellus Shale.
That credit, which will be available from 2017 through 2042 and depends on Shell spending a projected $4 billion to build the facility in southwestern Pennsylvania, was originally capped at $66 million a year. That cap was removed over the weekend.
Another shift to help business was a change in the way corporate net income-tax liability is calculated. The projected benefit to businesses is $12 million to $13 million in the coming fiscal year, Miskin said.
In a smaller measure, lawmakers scrapped the agricultural inheritance tax, which was 4.5 percent for adult children and 12 percent for brothers and sisters of the deceased.
The change, which applies only to working farms, is projected to keep about $3 million out of the state’s coffers, Miskin said. “That’s something that’s been very important” to the agricultural community, he said.
The old law was “especially challenging for farmers, who typically have low cash reserves but need large amounts of land for their operations. Farmers are often faced with added difficulties, when they are forced to sell off assets or farmland to pay off inheritance taxes,” said farm bureau president Carl T. Shaffer.
Among the bills that passed in the weekend rush was one that legalizes public-private transportation partnerships in Pennsylvania to deal with the state’s crumbling infrastructure.
The law, which had the support of a broad range of industry groups, allows state and local government to turn over the operation of roads, bridges and public transit to private companies for up to 99 years.