HARRISBURG, Pa., Jan. 31, 2006 (PRIMEZONE) -- The Pennsylvania Chamber of Business and Industry said it was perplexed by Gov. Ed Rendell's call today for modest business tax reductions as part of his proposed 2006-07 budget in light of his recent veto of incremental tax reductions that were supported by a broad coalition of business interests.
"Just a month ago, the General Assembly sent the governor a fiscally responsible business tax reduction bill. House Bill 515 included tax priorities that business leaders across the Commonwealth indicated are necessary to begin improving Pennsylvania's economic competitiveness," said Jim Welty, PA Chamber vice president of legislative and corporate affairs. "Ignoring the collective input from the private sector, the governor rejected the measure, going as far as characterizing supporters as 'more interested in their own pocketbooks and less interested in being financially responsible.'"
In vetoing H.B. 515, Rendell said the state could not afford its $45 million cost next year, despite the fact that it has arguably been paid for by excess 2005 corporate revenue collections.
The governor's proposed tax cuts, absent the two substantive priorities of the collective business community -- raising the cap on net operating losses to $10 million or 75 percent of a company's net income and adopting a single sales factor for Corporate Net Income tax apportionment -- carry a $35.5 million price tag.
"What a difference a month makes," Welty said. "In December, we didn't have the money for what business leaders want, but today we do have the money to afford what the administration wants. Business needs consistency from government, and we're not getting it.
"As we have seen with the phase out of the Capital Stock and Franchise tax, a multi-year plan to improve our tax structure has proven an effective tool to help improve our business climate and provide a roadmap for future fiscal planning," Welty continued. "There's little difference between responsibly planning for the ongoing Capital Stock and Franchise tax phase out and the proposed net operating loss and sales factor changes that were contained in House Bill 515. Each issue is about improving the uncompetitive provisions in Pennsylvania's tax law.
"With the administration now acknowledging that there is money available to begin investing in the long-term economic viability of the Commonwealth through improvements to its business tax structure, the Chamber looks forward to working with the governor and state lawmakers to advance reforms job creators say are needed to move the state forward."
The Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with more than 12,000 members representing more than 50 percent of the private workforce. More information is available on the Chamber's website at www.pachamber.org.
The PA Chamber of Business and Industry logo is available at: http://media.primezone.com/prs/single/?pkgid=353.