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June 23, 2008 Pennsylvania Senate Republican News Brief"If the Rainy Day Fund is raided now to pay for the high level of spending the Administration is insisting on, how will the money be found next year to pay for a comparable increase atop it, when nearly every economic forecast projects the revenue problem to be much worse?" -- Senate Appropriations Committee Chairman Gib Armstrong (R-Lancaster) on increased spending proposed by the Rendell Administration. Preview ONGOING BUDGET NEGOTIATIONS, KOZ, NOMINATIONS ON AGENDA Work toward finalizing a 2008-09 state budget continue this week. The Senate moved the process forward last week with passage of a budget bill. (Please see Review, below.) The Senate is also expected to consider Senate Bill 1412, proposed changes to Keystone Opportunity Zones, as well as nominations to the Supreme Court, Superior Court, Commonwealth Court, and the Public Utility Commission. Review SENATE APPROVES TAX STIMULUS PACKAGE The Senate approved a sweeping four-bill stimulus package on June 16 that would provide nearly $96 million in tax relief in the upcoming fiscal year for lower-income working Pennsylvanians, small businesses looking to expand, as well as major employers and job creators. Senate Finance Committee Chairman Pat Browne (R-Lehigh) said: "The package approved by the Senate today is the result of intensive study and review of a number of proposals with the goal of finding the optimum combination to provide tax relief where it is most needed and best be able to stimulate Pennsylvania's economy." The bills were sent to the House of Representatives. For details of the package, please see In the Spotlight, below.
SENATE PASSES 2008-09 BUDGET BILL The Senate on Wednesday approved Senate Bill 1389, a budget proposal for Fiscal Year 2008-09. The measure calls for $27.9 billion in general fund spending, which is an increase of $749.2 million (2.76 percent) over the current budget. The proposal is $415.8 million lower than what the governor requested for FY 2008-09. Overall, Senate Bill 1389 cuts $457.2 million from specific line items in the budget proposal unveiled by the governor in February. The Senate Republican proposal adds $41.4 million in spending not requested by the governor, primarily through a 1-percent cost of living adjustment for community Mental Health/Mental Retardation providers ($33.4 million). The remaining $8 million is for restorations of cuts proposed by the governor. Senate Bill 1389 was sent to the House of Representatives for its consideration. Senate Appropriations Committee Chairman Gib Armstrong (R-Lancaster) said: "This is not a year where we can afford to satisfy spending requests, make commitments to new programs and expensive program expansions, or rely on gimmicks to push tough decisions into next year." For more on the budget process, please see
Fast Facts, below. SENATE PASSES BILL TO AID IN CLEAN-UP OF WASTE TIRE PILES The Senate approved legislation Wednesday to aid municipalities in cleaning up waste tire piles that are a danger to the environment and public safety. Senate Bill 1050, sponsored by Sen. Lisa Baker (R-Luzerne), would reauthorize an annual transfer of $3 million from the state's Recycling Fund to the Used Tire Pile Remediation Restricted Account. The bill does not divert funds from county recycling programs. Funding for tire cleanups expired in 2001 despite there being at
least 39 piles throughout the commonwealth with at least 10,000 tires
each, some with hundreds of thousands. More than 85 percent of the
stockpiled scrap tires in the United States are located in just seven
states, including Pennsylvania. The bill was sent to the House of
Representatives for consideration. FINANCE COMMITTEE APPROVES 100 PERCENT TAX RELIEF BILL The Senate Finance Committee, chaired by Sen. Pat Browne (R-Lehigh), approved legislation Wednesday that would allow for a 100-percent homestead exemption. Senate Bill 404 is a proposed constitutional amendment that would lift the current cap on the homestead exemption that may be granted by county and local taxing jurisdictions. Currently, homestead exemptions can be no more than 50 percent of the median assessed value of all residential properties. Constitutional amendments must be approved during two consecutive sessions of the General Assembly and then approved during a statewide referendum of the voters. "This bill is not a mandate, but rather is intended to provide flexibility to state, county and local taxing bodies by allowing them to provide homestead exemptions of up to 100 percent of each property's assessed value," said Senator Browne, the prime sponsor of the bill. "This gives taxing officials the opportunity to provide true and total relief to residential homeowners." SENATE APPROVES BILLS ADDRESSING ADA CONCERNS The Senate approved a package of bills Tuesday introduced by Sen. Bob Robbins (R-Mercer) to bring municipal law provisions governing pre-hiring examinations of emergency responders in cities, towns, townships, and boroughs into compliance with the federal Americans with Disabilities Act. The ADA clearly prohibits requiring a medical examination of all applicants before an offer of employment. However, the ADA does allow medical examinations and inquiries with certain conditions. The measures ensure that local governments can screen candidates for essential public safety jobs in ways that are in compliance with federal and state anti-discrimination laws. Senate Bills 1363 thru 1368 deal with ADA Compliance: SB 1363 (Paid Firemen Civil Service Employee Law); SB 1364 (Local Police Officers Civil Service Employee Law); SB 1365 (Borough Code); SB 1366 (1st Class Township Code); SB 1367 (3rd Class City Code); and, SB 1368 (Firemen, Civil Service in 3rd Class Cities Law). SEN. ORIE CONTINUES EFFORTS TO ELIMINATE TAXPAYER SPENDING ON "CONSULTANTS" Legislation to limit payment of taxpayer funds to consultants for speculation by state officials on proposals to sell state-owned real property or assets was announced Wednesday by Sen. Jane Orie (R-Allegheny). The measure would require approval of the General Assembly before expending revenues to research or pursue sales or long-term leases of state property or assets. The bill would require legislative approval if the asset has a value over $200 million or the proposed lease is for a term of more than 10 years. To insure truly independent research, the bill would also provide that no consultant who performs an evaluation of a proposed sale or lease could be granted a financial stake in that sale or lease.
The Senate Republican plan to provide $96
million in tax relief to job creators and low-income families includes:
Senate Bill 1385, sponsored by Sen. Jake Corman (R-Centre), to expand the cap on the Net Operating Loss provision of the Corporate Net Income Tax to $5 million or 20 percent of taxable income. The NOL expansion is projected to save Pennsylvania employers $78.2 million by Fiscal Year 2010-11. Senate Bill 1387, sponsored by Sen. Pat Vance (R-Cumberland), to double the amount that small businesses may deduct on their income tax filing for the costs of machinery and equipment to $50,000, which is projected to provide $6.6 million in savings to Pennsylvania's small businesses. Senate Bill 1388, sponsored by Sen. John Eichelberger (R-Blair), to expand the Corporate Net Income Tax sales factor to 85 percent. Currently, the sales factor accounts for 70 percent of the apportionment formula, and the property and payroll factors each account for 15 percent. As a result, Pennsylvania companies are penalized by increased taxes when they hire new employees or make capital investments in the commonwealth. Senate Bill 1386, sponsored by Sen. Bob Regola (R-Westmoreland), to increase the eligibility limits for special tax forgiveness for low-income Pennsylvanians. Currently, a family of four with a combined income of less than $32,000 pays no state income tax. Under SB 1386, families earning $37,000 or less would be exempt.
Questions or Comments? Contact the Senate Republican Communications Office or call 717-787-6725.
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