OUR THOUGHTS ON:

Governor Corbett's Budget Focuses on Reform

State and Local Tax

By Cathleen Condrac

In his 2012-2013 budget address, Pennsylvania Governor Corbett emphasized his commitment to reform by “continuing to change the culture of government from one of entitlement to one of enterprise.”

Governor Corbett proposes the use of block grants for seven separate budget lines; an overhaul of the unemployment compensation system; the creation of new tax incentives and development assistance to businesses (Keystone Opportunity Zones); and the revitalization of the employment market through new programs targeting training for high-demand occupations. The Governor also proposes to transform the public welfare system to give incentives to those who are able to transition from the welfare line to the employment line while continuing to give “real relief to our poor.”

With an annual spending cut of $33 million, funding is reduced for 164 appropriations. The State System of Higher Education alone faces 20% cuts, while certain state universities, including the University of Pittsburgh, Penn State and Temple, may face 30% cuts.

Although Corbett recognizes that the transportation issues are critical, he considers these issues “too large” for a budget item and believes transportation must be confronted as its “own distinct and separate topic.”

Corbett ended his address stating, “[W]e must continue the journey that will turn the road to recovery into the path to prosperity.”

Additionally, legislation (HB 2150) is currently being considered to close the Delaware Holding Company “Loophole” and reduce other business taxes in the Commonwealth. Please refer to the previous January 23, 2012 Insight for further discussion on the Delaware Holding Company “Loophole” and proposed business tax cuts.

© 2012 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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