State Budget Hearings Focus on UC Fraud, Proposed CNI Tax Reduction

Pennsylvania House and Senate Appropriations Committees continued budget hearings last week when they heard from state agencies, including the PA Departments of Labor and Industry, Environmental Protection and Community and Economic Development. The annual six-week process includes both the House and Senate Appropriations Committees breaking down Gov. Tom Wolf’s $43.7 billion spending plan with the heads of state agencies, row offices, and state-related institutions.

Questions from numerous House members to Labor and Industry Secretary Jennifer Berrier focused on the many problems surrounding the state unemployment compensation system. Berrier was questioned about the work search requirement, accountability for job applicants who fail to show up for interviews and how the department is responding to allegations of fraud.

new report by the State’s Independent Fiscal Office shows more than $6 billion in unemployment compensation money was stolen from Pennsylvania across all programs during the pandemic through last September. That’s nearly a 13 percent fraud rate. Secretary Berrier indicated that letters for free credit monitoring will go out to some 900,000 unemployment compensation recipients in the near future.

Lawmakers also questioned Berrier on why Gov. Tom Wolf did not propose the use of federal pandemic relief to pay down a $736 million debt in the unemployment trust fund as other states have, noting the cost will be passed on to employers if it’s not resolved by November.

During the DEP budget hearing, Appropriations Chairman Rep. Stan Saylor, R-York, outlined how permitting delays often result in investments and jobs locating in other states. DEP Secretary Patrick McDonnell cited improvements but acknowledged more needs done. Rep. Ryan Warner, R-Fayette, summarized energy policy failures of the Biden and Wolf administrations and missing sanctions on the importation of Russian energy. Warner also warned about the threats imposed by Pennsylvania’s entry into the Regional Greenhouse Gas Initiative.

During the PA Department of Community and Economic Development budget hearing, the PA Senate Appropriations Committee heard about concerns with the State’s high Corporate Net Income Tax rate. DCED Acting Secretary Neil Weaver agreed that the high CNI is a roadblock to attracting business to Pennsylvania. Members on both sides of the aisle lauded Governor Wolf’s proposal to reduce the CNI Tax rate. However, the PA Chamber previously stated its concern with the proposal’s subjective expansion of the State’s taxing authority, citing the need for clear, predictable standards for employers to follow.

The Wolf administration and the General Assembly must agree to a spending plan by the Constitutional deadline of June. 30. The new fiscal year begins July 1.


Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.