The use of tax credits and state subsidies has grown significantly in recent years, and the trend is expected to intensify in the near future.
A report from the Independent Fiscal Office noted that Pennsylvania awarded $857 million in tax credits in fiscal year 2022-23, and the IFO projects that $1.23 billion will be given away in 2023-24.
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When the pandemic hit, state and federal governments upped financial aid to the public with more welfare benefits, stimulus checks and loans.
That aid is still high in some cases, with no signs of changing.
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Pennsylvania’s investment in film tax credits hasn’t delivered the economic returns policymakers had anticipated, according to a recent analysis.
In its five-year review, the Independent Fiscal Office said the program’s $8.5 million net tax revenue does accomplish its legislative intent, even if tens of thousands of dollars in potential profit seep out of the state in the meantime.
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The Pennsylvania Treasury’s “dramatic” revenue gains may soon come to an end, according to a recent independent analysis.
Before 2019, investing unused state funds netted the treasury between $8 million to $72 million in revenue. As an analysis from the Independent Fiscal Office noted, revenue was only $9 million in fiscal year 2020-21.
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A boom year from natural gas impact fees in 2022 could be followed by a dramatic drop in payments, according to a recent analysis.
The data suggests that, rather than setting a new floor and bringing in steady funding in the future, recent record-setting payments are a blip.
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Pennsylvania’s House of Representatives this week passed legislation raising the state minimum wage to $15 per hour by 2026 and permanently indexing it to inflation going forward.
Currently, the Keystone State mandates $7.25 in minimum hourly pay for most workers. If the bill passes the state Senate it will receive the supportive Democratic Governor Josh Shapiro’s signature and become law. The measure, sponsored by Representative Jason Dawkins (D-Philadelphia) will move the low-end wage to $11 per hour next January and $13 per hour the following January before bringing it to $15 the year after that.
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State representative Dallas Kephart (R-PA-Clearfield) wants to reduce Pennsylvania’s corporate net income tax (CNIT) to four percent by 2025.
Last year, lawmakers budgeted a gradual decrease in the CNIT from 9.99 percent to 4.99 percent over the coming decade. Before the change, the Keystone State charged corporations the highest state business tax in the U.S., behind New Jersey’s 11.5 percent rate. Now at 8.99 percent, Pennsylvania’s levy is 8.99 percent — the fifth highest. Assuming other states’ rates stay constant, Pennsylvania’s CNIT will end up roughly in the middle in terms of corporate taxes in 2031.
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Pennsylvania state Senator Devlin Robinson (R-Bethel Park) this week proposed changing a program that subsidizes film production to the tune of $100 million annually.
The Keystone State allots the film-production tax credit to movie and television projects on the basis that it generates net economic growth by bringing in new (if temporary) jobs and boosting local businesses. Robinson is circulating a memorandum among Senate colleagues suggesting the program could benefit from an increased focus on multi-year projects to make the job gains attributable to the program more stable.
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In a bipartisan 8-3 vote on Tuesday, Pennsylvania’s Senate Finance Committee passed legislation to speed the state’s reduction of its corporate net income tax (CNIT).
Last year, as part of the Keystone State’s budget, lawmakers initiated a reduction of the CNIT from 9.99 percent to 4.99 percent over the next decade. Before the change, Pennsylvania had the second-highest state corporate tax in the U.S. behind New Jersey’s 11.5-percent rate.
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A Pennsylvania lawmaker wants to use the state’s Rainy Day Fund to pay down the state’s unfunded pension liabilities that total more than $60 billion.
State Representative Joe Ciresi (D-Royersford) is asking colleagues to cosponsor a bill to move $670 million from the fund to the Public School Employees’ Retirement System (PSERS) and $330 million to the State Employees’ Retirement System (SERS). A memorandum describing his legislation avers it could save local real-estate taxpayers $2.1 billion over the next 20 years.
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According to a new analysis by the nonprofit American Legislative Exchange Council (ALEC), Pennsylvania ranks 46th among states for economic performance and 35th for economic outlook.
Now in its 16th edition, ALEC’s Rich States, Poor States compares states’ economic posture based on 15 policy factors. Pennsylvania’s performance only ranked ahead of West Virginia, Connecticut, Alaska and — in dead last — Louisiana.
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Pennsylvania Governor Josh Shapiro (D) is already claiming high-ranking Republicans “are praising” his first budget. Those Republicans’ actual remarks tell a different story.
A press release from the governor selectively quotes eight GOP state lawmakers’ reactions to the budget he unveiled last week. While the snippets accurately capture areas of agreement, they leave out decidedly negative sentiments the Republicans voiced about the $45.9 billion plan which would hike state spending by about four percent over the current level.
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Republicans lawmakers will again tackle regulatory reform and the separation of powers in the new legislative session. Previous efforts made some progress, but failed to become law. The latest attempt is proposed Senate Bill 188 that would require legislative approval of “economically significant regulations.”
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Pennsylvania is missing young workers and the problem is one that won’t simply go away.
While the commonwealth isn’t the only state struggling with a shrinking youth population, state-to-state comparisons are difficult to make due to data issues. What’s clear is that Pennsylvania has had a significant drop in its labor force participation rate. Rather than a story of older workers retiring, the majority of missing workers are under 45 rather than over.
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Pennsylvania’s tax revenues are $129 million short of expectations, though overall collections remain above initial estimates in the latest revenue update from the Independent Fiscal Office.
Even though the November collections were 4.5% less than anticipated, the fiscal-year-to-date revenues are about $732 million above estimates, an almost 5% increase.
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State revenues from natural gas were high last year, and are expected to set a new record this year buoyed by rising prices and more drilling.
According to a new estimate from the Independent Fiscal Office, impact fees from natural gas wells will hit $275 million in 2022, $40 million higher than 2021.
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Two Pennsylvania state representatives this weekend proposed an audit of Philadelphia and Pittsburgh’s major-league sports teams’ rental payments for their stadiums.
Citizens Bank Park in Philadelphia and PNC Park in Pittsburgh were among several stadiums benefiting from the Capital Facilities Debt Enabling Act of 1999, whereby the commonwealth would pour $320 million into the construction of new sports buildings. The arrangement entailed each arena paying $25 million in rent to the state every decade minus some deductions based on tax revenues the stadiums brought into government coffers.
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A report released Monday by Pennsylvania’s Independent Fiscal Office (IFO) shows that new Keystone-State employment opportunities fell in June, marking a three-month overall decline.
Examining numbers from the federal Department of Labor, the IFO found that around 393,000 new jobs opened in June. Although that number exceeds the 281,000-per-month average for job openings that preceded COVID-19 in 2020, it continues a downward slope that began after new employment offerings reached 514,000 in March.
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A report released this week by Pennsylvania’s Independent Fiscal Office (IFO) indicates that 120,000 fewer residents are working or actively seeking work than in the year before the COVID-19 pandemic hit.
The study showed the state’s labor force participate rate (LFPR) for those aged 16 and older to be 63 percent in May 2019 and to have declined to 61.9 percent one year later. That percentage has continued gradually decreasing — to 61.8 percent in May 2021 and to 61.7 percent two months ago.
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On Tuesday, at the first Pennsylvania Senate hearing on next fiscal year’s budget, lawmakers considered the state’s slow economic recovery—and the state’s failure to attract new residents.
Independent Fiscal Office (IFO) Director Matthew Knittel testified before the Senate Appropriations Committee regarding the state’s fiscal, economic and demographic outlook. Particularly in that last category, the Keystone State doesn’t boast an envious position.
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