A bipartisan vote of 70 Republicans and 32 Democrats Tuesday was enough to pass a Tax Code bill-- House Bill 542 (Thomas-D- Philadelphia)-- another attempt at putting a revenue package on the Governor’s desk to support the $31.9 billion General Fund budget the General Assembly passed in June.

House Majority Leader David Reed (R-Indiana) said the bill authorizes the Commonwealth Financing Authority to borrow $1.5 billion by securitizing or “liquidating” the Tobacco Settlement and possibly some other General Fund monies, would apply the Sales Tax to online marketplaces ($43.5 million) and impose a new 12 percent assessment on fireworks purchases ($31.7 million).

Also included are provisions related to the Net Operating Loss in the event of an adverse PA Supreme Court decision*, changes to the timing and withholding of individual and lease taxes, a deduction for manufacturing innovation and reinvestment was added along with establishing two film production tax credit districts and an entertainment economic enhancement program tax credit for rehearsal areas.

There is no commercial storage, hotel or natural gas severance tax.  Click Here for more on the severance tax.

There are no environmental riders and the Wild Resource Conservation Tax Checkoff is also extended indefinitely.

Click Here for a House Fiscal Note and summary.

The bill now goes back to the Senate for a concurrence vote. 

Senate Majority Leader Jake Corman (R-Centre) said Wednesday the Senate will give the House revenue package “serious consideration” over the next few days and hopefully come back next week ready finish work on the budget, adding “there is a lot of value in getting this done.”

He said amending what the House sent over and returning it and expecting success was a longshot at best.

Gov. Wolf’s office said the House proposal does not meet the Governor’s targets for new, recurring revenues and again urged the General Assembly to pass a natural gas severance tax.

The Governor’s Office expressed the hope this proposal will serve as a launching point for the next, and hopefully final, round of budget negotiations.

Other Budget Pieces

The other parts of Majority Leader Reed’s revenue package, but not yet scheduled for action by the House, are--

-- Administrative Code Bill-- House Bill 118 (Kaufer-R-Luzerne)-- was approved Wednesday without changes and sent to the Governor who is expected to sign in or let it become law.  It does include environmental riders that concern may groups, but it also extends the $2/ton Recycling Fee indefinitely and requires solar energy credits under the Alternative Energy Portfolio Standards Program to be purchased within Pennsylvania. Click Here for more;

-- $300 million in special fund transfers (picked by the Governor in some options) to the General Fund using any one of several bills as potential vehicles; and

-- $200 million as a result of gaming expansion possibly using House Bill 271 (Ortitay-R- Allegheny) now in the Senate Rules Committee.

Rep. Reed also said it was a House Republican goal to pass funding for state-related universities.

What’s Next?

House Republicans Thursday canceled voting session for the week of October 23 saying they were waiting for the Senate to act on budget bills.  While the Speaker put members on a 12-hour call, the next scheduled session days for the House start the week of November 13, after the election.

The Senate is still set to return to voting session October 23, then they too will be off until November 13.

There are likely to be more twists and turns in the bumpy 115 day ride to finishing the state budget. 

Then, in just over 3 months, Gov. Wolf presents his FY 2018-19 budget and we start all over again!

NewsClips:

Frye: Hunting, Fishing License Fees Seem Unlikely To Increase

Op-Ed: A Parks Perspective: Recreation Services Essential

AP: Natural Gas Severance Tax Gets Life In House [Nothing For Environment]

Meyer: Severance Tax OKd By Committee, May Hit Wall [Nothing For Environment]

Lawmaker Says Severance Tax Will Crush Jobs [Nothing For Environment]

AP: PA’s Budget Fight Will Come With Its Own Price Tag

Thompson: House Passes Budget Balancing Plan, No Finality In Sight Yet

Meyer: Democrats, Moderate Republicans Push A Shale Tax

Murphy: Halting Progress Continues On Budget Front As Exasperation Grows

Meyer: House Budget Plan Disliked By Senate, But Being Considered

Could Latest PA Budget Plan Be As Good As It Gets?

Editorial: Free-Spending Legislature Shortchanges Citizens

What It Looks Like When An industry Controls A State’s Politics (PA)

Related Stories:

House Sends Admin Code Bill To Governor WITH Environmental Riders

House Finance Committee Reports Out Natural Gas Severance Tax, Minimum Royalty Bill

* The PA Supreme Court ruled Wednesday against Nextel and requiring the state to refund tax money they paid.

[Posted: Oct. 17, 2017]

10/23/2017