The Pennsylvania House and Senate Appropriations Committees continued budget hearings last week when they heard from state agencies, including the Department of Health and the Budget Office. 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.
Budget Secretary Greg Thall was questioned about Gov. Wolf’s proposal to reduce the corporate net income tax from 9.99 percent — the second-highest state corporate tax in the U.S. — to 7.99 percent by 2023 with further reductions to 6.99 percent in 2026 and 5.99 percent in 2027. Thall, however, said that the CNI tax cut would probably be the first idea to get nixed if the Governor’s revenue projections proved overoptimistic, as estimates from the Independent Fiscal Office suggest.
In his remarks, Thall noted that he originally proposed lowering the CNI by one percentage point, but the Governor was persuaded by the PA Chamber of Business and Industry that to make the state more competitive for attracting business, a higher reduction was needed.
During Wednesday’s budget hearing before the Senate Appropriations Committee, shoring up the public health network two years into the COVID-19 pandemic emerged as a priority issue. In fact, Acting Health Secretary Keara Klinepeter said that a department survey found that a significant number of hospitals in urban and rural areas are in financial danger of closing.
This was the final week of budget hearings in the House, with the Senate concluding next week.
“One thing that has become abundantly clear throughout the process of these hearings is that even the governor’s own secretaries have a hard time explaining the governor’s budget – at times not even aware of proposed increases within their own budgets,” said House Appropriations Committee Chairman Stan Saylor, R-York.
“The governor’s massive spending spree would squander the entirety of our reserves and leave the next governor with massive budget deficits, with no reserves to combat it, and would guarantee the need to raise taxes or cut services,” he added.