PA Budget Update

On Tuesday, February 7, Governor Wolf gave his third budget address since being elected Governor. And the Governor held true to his word that he would not seek an increase in the tax rates for income or sales.

Instead, the Governor proposed some consolidations (combining 4 departments – Health, Human Services, Aging and Drug & Alcohol – into one) and closings (closing a prison in western Pennsylvania) which would incur some savings. Additionally, the Governor proposed some new revenue options like internet gaming (approximately $150 million in estimated revenue) and also charging a $25 per resident fee if you live in a municipality which uses the state police for PRIMARY protection.

And while I must STRESS to you that this is merely just his PROPOSAL, the Governor also wants to change state tax credits offered to businesses and other groups by 20 percent. This “cost-savings proposal” would convert an array of state tax credits into a block grant. That would enable Wolf Cabinet officials to give priority to those tax credits providing the greatest opportunities for business investment, education access and community development. The state revenue available to support these tax credits would be reduced by $100 million next year from a current level of nearly $500 million if lawmakers adopt the proposal.

Department secretaries also would give priority to funding tax credits based in part on their performance in meeting goals and the demand for them, said state Budget Secretary Randy Albright.

Listed individually, the Governor still “allocated” $65 million to the film tax credit; as well as new job tax credit, $10 million; research and development, $55 million; Keystone Opportunity Zones, $78 million; educational improvement, $125 million; educational opportunity scholarship tax, $50 million; historic preservation incentive, $3 million; and coal refuse energy and reclamation, $10 million.

The important thing to note, again, is that this is just his proposal and details are still limited. More importantly, the governor’s tax credit proposal is already receiving pushback from lawmakers. And YOUR association, PaFIA, is meeting with legislators, the Governor’s office, and the Department of Community and Economic Development to voice our concerns with the block grant approach. PaFIA is also expressing appreciation for the program and sharing positive stories of film industry growth and progress over the years.