Gov. Wolf Outlines Budget Priorities
With the budget deadline for the new fiscal year fast approaching, Gov. Tom Wolf recently outlined his priorities in the push toward a final budget agreement.
“In February, I presented a budget that closed the deficit and protected investments in schools, seniors, and fighting the heroin epidemic. This proposal included more than $2 billion in cuts, savings, and efficiencies, and $1 billion from a severance tax and closing loopholes …. I believe strongly that the General Assembly can build on this proposal and compromise to achieve a responsible, long-term, final budget.”
A final agreement must achieve, according to Wolf, the following goals:
- It should be a long-term solution to Pennsylvania’s budget challenges through a combination of savings, efficiencies, and closing loopholes.
- It should protect Wolf’s proposed investments in our schools, from pre-K to higher education.
- It should allow government to work more efficiently, deliver better services, and generate long-term savings, including the creation of the Department of Health and Human Services and the creation of the Department of Criminal Justice.
In April, the Pennsylvania House approved a $31.5 billion spending plan (House Bill 218) for the new fiscal year that spends $246 million less than the current year budget and $815 million less than Wolf’s $32.3 billion proposal. The plan includes no broad-based tax increases, but does adopt much of Wolf’s proposed streamlining and consolidation of state operations.
With most of the budget unresolved, the PICPA government relations team will be actively monitoring legislative activity all of next week. For timely updates, follow us on Twitter.
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Senators Introduce Plan to Eliminate School Property Taxes
A bipartisan group of state lawmakers joined together to introduce a plan drafted by more than 80 taxpayer groups from across the state to eliminate school property taxes for the state’s 500 public school districts.
Senate Bill 76, the Property Tax Independence Act, would replace the revenue generated by the property tax for public schools with an increase to the personal income tax rate from 3.07 percent to 4.95 percent and an increase in the sales and use tax from 6 percent to 7 percent. The sales and use tax would also be expanded to cover goods and services that are currently exempt.
The PICPA strongly opposes the measure. It is fiscally unsound and would create a public education funding crisis. Senate Bill 76 was referred to the Senate Finance Committee.
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C. Daniel Hassell Confirmed as Revenue Secretary
The Pennsylvania Senate this week unanimously approved C. Daniel Hassell as secretary of the Pennsylvania Department of Revenue.
“Dan is a tax policy expert with more than three decades of experience with the commonwealth,” noted Gov. Tom Wolf. “As a former secretary of revenue and most recently the department’s deputy secretary for tax policy, he has an excellent reputation for evaluating tax legislation, regulations, and procedures.”
Hassell was nominated by Wolf on April 24, 2017. As Wolf noted, Hassell has more than three decades of experience as a senior tax policy analyst with the Department of Revenue and the Pennsylvania Senate. In December 2009, Gov. Edward G. Rendell nominated Hassell as secretary of revenue, and he served in that capacity from April 2010 until January 2011. He has previously served as deputy secretary for tax policy for the Department of Revenue, where he coordinated department decisions on all aspects of tax policy.
Hassell is an Erie native who earned a bachelor of arts from Westminster College and a master of science in public management and policy from Carnegie Mellon University’s Heinz School of Urban and Public Affairs. Hassell also completed a program for senior executives in state and local government offered by Harvard University’s John F. Kennedy School of Government.
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House Adopts Resolution Calling for Examination of Tax System
The state House unanimously adopted a resolution calling for the creation of a select subcommittee to examine Pennsylvania’s tax collection system and suggest improvements.
House Resolution 327, sponsored Rep. Jake Wheatley (D-Allegheny), Democratic chair of the House Finance Committee, establishes that the Select Subcommittee on Tax Modernization and Reform would be tasked with making a thorough review of the process, rates, and methods by which the commonwealth collects revenue, and the collective impact on taxpayers.
Wheatley said he wants the subcommittee to delve into deeper issues than just taxing and spending, and consider what the commonwealth is seeking to create or achieve in its budgeting process.
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Bill Would Limit PIT Education Deduction to PA 529 Contributions Only
The House Finance Committee reported legislation that will limit state personal income tax deductibility for contributions made to a federally qualified tuition program to Pennsylvania’s 529 College Savings Program only.
House Bill 1385, sponsored by Rep. Brett Miller (R-Lancaster), limits the personal income tax deductibility for contributions made to the PA 529 College Savings Program, and no longer allows the deduction for out-of-state programs. Under existing law, contributions to any state’s 529 program are deductible from Pennsylvania’s personal income tax. Pennsylvania is one of six states that permits a personal income tax deduction for participating in out-of-state 529 programs.
Under an amendment offered by Rep. Michael Corr, CPA (R-Montgomery), and adopted by the committee, the deduction would remain for contributions made to adviser-sold 529 plans, until such time that the Treasury establishes a Pennsylvania 529 adviser-sold plan.
The bill now goes to the House for consideration.
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Senate Health Committee Endorses Opioid Prescribing Guidelines Bill
Legislation implementing opioid prescribing guidelines developed by Gov. Wolf’s Safe and Effective Prescribing Practices task force was unanimously supported by the Senate Health and Human Services Committee.
Senate Bill 655, according to Sen. Gene Yaw (R-Lycoming), prime sponsor of the bill, makes mandatory the current voluntary guidelines developed by the Task Force on the proper and safe prescribing of opioid-related pain medications. These guidelines encourage the judicious prescribing of opioid pain medications in nine areas, and also call for alternative clinical interventions prior to the initiation of opioids.
The bill now moves to the Senate for consideration.
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Medical Marijuana Permits for Growers/Processors Announced
The Pennsylvania Department of Health released information on the issuance of 12 permits for medical marijuana growers/processors in the state. Those granted permits will now have six months in which to become operational before they can begin growing medical marijuana. Entities receiving permits were notified by mail.
The 12 permits were issued to:
| ||Northcentral Region |
|Prime Wellness of Pennsylvania LLC || ||Terrapin Investment Fund 1 LLC |
|Franklin Labs LLC || ||GTI Pennsylvania LLC |
|Northeast Region || ||Southwest Region |
|Pennsylvania Medical Solutions LLC || ||AGRiMED Industries of PA LLC |
|Standard Farms LLC || ||PurePenn LLC |
|Southcentral Region || ||Northwest Region |
|Ilera Healthcare LLC || ||Holistic Farms LLC |
|AES Compassionate Care LLC || ||Cresco Yeltrah LLC |
Scores for all grower/processor applicants are available on the Department of Health website.
The Office of Medical Marijuana received 457 total applications: 177 for growers/processors and 280 for dispensaries.
The medical marijuana program became effective on May 17, 2016, and is expected to be fully implemented in 2018. The program will offer medical marijuana to patients who are residents of Pennsylvania and under a physician’s care for the treatment of a serious medical condition as defined by Act 16.
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AICPA Praises U.S. House for Passing Mobile Workforce Bill
The PICPA and the American Institute of CPAs (AICPA) applauded the U.S. House of Representatives for passing the Mobile Workforce State Income Tax Simplification Act of 2017 (H.R. 1393). The bill would simplify state income tax reporting and withholding rules for employees who sometimes work outside their home states.
The legislation would create a uniform national standard that would eliminate the compliance maze many employers and employees face because they must keep track of numerous state income tax withholding laws and varying de minimis exemption periods imposed on nonresident workers. Employee earnings would not be subject to state income tax and withholding outside their home state unless the employee worked in a state for more than 30 days during the calendar year.
However, under H.R. 1393 notable individuals – such as professional athletes, professional entertainers and public figures – do not qualify for the 30-day de minimis exemption. They would still have to pay tax to the state where they are appearing. Nonheadline performers, including dancers and musicians, would be covered by the 30-day national standard.
The PICPA appreciates the support of Pennsylvania’s Congressional delegation, with a special thanks to Reps. Tom Marino and Mike Doyle for co-sponsoring the measure. H.R. 1393 now goes to the U.S. Senate for consideration.
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