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PA Lawmakers Question Governor’s Corporate Tax Proposals—Again

HARRISBURG, PA (WSKG) — Lawmakers in Harrisburg have begun their annual budget hearings-a series of discussions with state department heads over Governor Tom Wolf’s proposals for next fiscal year’s spending plan.

The Republicans who control the legislature spent much of their first day of hearings on an issue that’s been stalled for years: restructuring Pennsylvania’s corporate taxes.

At 9.99 percent, Pennsylvania’s corporate net income tax is relatively high. GOP lawmakers have long expressed concern that it’s deterring companies from setting up shop in the commonwealth.

For the fifth year in a row, Governor Tom Wolf is proposing lowering the rate and simultaneously instituting combined reporting – a mechanism wherein states can ensure companies aren’t hiding some of their assets.

In a hearing with Revenue Department officials, Westmoreland County Republican George Dunbar said he’s extra concerned about this year’s proposal. Instead of being revenue-neutral as usual, Wolf is predicting it’ll add some cash.

“So, this is an assumption we didn’t make in 15-16, we didn’t make it in 17-18, we didn’t make it in 18-19, we didn’t make it in 19-20,” Dunbar said. “If we screw up one estimate we could be pushing ourselves off a fiscal cliff.”

Revenue Department Secretary Daniel Hassell said the change is just due to updated revenue projections.

Some lawmakers have said they’re open to combined reporting.

But GOP Pike County Representative Mike Peifer said it’s starting to seem increasingly unlikely.

“So, we’re all intrigued by the concept of reducing that rate,” he said. “But it just seems like we’re not able to circle the wagons on this concept.”

In particular, GOP legislative leaders haven’t gotten on board with the proposal.