A leading business voice in Pennsylvania says Gov. Tom Corbett’s emphasis on limiting state government to core functions, reforming the public pension system and rebuilding road and highways already makes this a very pro-business budget.
But wait. There’s more!
The plan is also expected to continue the long march toward the elimination of much-reviled tax on business assets, which will drop to .89 mills for 2013, and then — barring unforeseen circumstances — go away entirely as of January 2014.
The so-called Capital Stock and Franchise Tax – seen as a second property on Pennsylvania-located businesses – was at 10.99 mills when the phase-out began in 2000.
At the time, it was costing state businesses a little more than $1 billion a year; in Corbett’s new budget that will be less than $200 million.
To Gene Barr, president and chief executive officer of the Pennsylvania Chamber of Business and Industry, it is definitely a right track budget for Pennsylvania businesses, even with the prospect of higher fuel prices from Corbett’s transportation plan.
The point there, Barr said, is that all Pennsylvania businesses and workers need a strong transportation system, and the money has got to come from somewhere.
If the revenue is derived from higher fuel taxes, that is essentially placing the cost on users, which is fair, Barr believes.
The chamber and some other business groups have already endorsed Corbett’s liquor privatization plan as a blow for the free enterprise system that could also help promote STEM training in schools without raising taxes.
“We have members who want to participate in it (liquor sales),” Barr said this week, “and who believe they can do a better job than the Commonwealth does.”
And finally, there is pension reform.
Business leaders see the twin pension systems for state and public school employees as a fiscal toxin that could undermine the tough choices Corbett has made to get state spending in order in his first two years.
In fiscal 2014 alone, the state’s pension tab alone is expected to rise by $511 million,
“We’re talking about bringing reforms to a system that deparately needs it, and that could reduce the risk of higher taxes in the future,” Barr said.
They are significant proposals, and they will inevitably hit barriers along the way to enactment. But as an agenda-setting document, Barr said, Corbett’s plan works for him.
“These are major lifts, and it’s gong to be a busy next few months,” he said.