Harrisburg has been abuzz with talk of what Gov. Tom Wolf will propose in his first budget address next week. The new Governor put a rest to some of the rumors Wednesday when he announced key pieces of his budget plan to a crowd of business leaders and elected officials in Bethlehem.
Wolf’s budget plan includes a sweeping tax relief package that would cut Pennsylvania’s corporate net income tax in half within two years. If successful, the state would move from the second highest rate in the country at 9.99 percent to the fourth lowest at 4.99 percent.
In addition, businesses would be required to practice “combined reporting,” a method by which multi-state corporations would have to file tax reports that include all of its stores nationwide. Even with combined reporting, “this is a big drop in corporate taxes,” Wolf said in Wednesday’s speech.
A third goal of the tax relief package is to eliminate the capital stock and franchise tax, which Wolf said he, as a businessman, knows is unfair.
“We need to rebuild the middle class, and we can do that by creating good jobs right here in Pennsylvania,” Wolf stated. “For too long the Commonwealth of Pennsylvania hasn’t been a place where businesses want to come, invest and grow. Country-leading high corporate tax rates have slowed existing businesses from expanding and entrepreneurs from growing new ideas here.”
To encourage this job creation, Wolf proposed a $5 million tax credit, dubbed the “Made In Pennsylvania Job Creation Program,” to be distributed among manufacturing companies who excel job creation. And to foster entrepreneurship, he called for a $5 million grant to the state’s Industrial Resource Centers.
“The Commonwealth can help set the table for robust private sector growth to create and retain good jobs while strengthening the middle class,” Wolf stated. “In order to create jobs that pay and an economy that grows, we must acknowledge that success will require investment in our companies and our people, and a new business climate that is welcoming and fair.”
Wolf also announced his intent to increase funding for the states educational and job training programs in an effort to help develop talent locally.
All of Wolf’s budget plans will need to pass the Republican-controlled legislature. Wolf will reveal his entire budget proposal, along with its financial impacts, in front of the General Assembly on Tuesday.