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2017-18 Budget Finalized as Key Revenue-Related Bills Become Law

On Oct. 30, Gov. Tom Wolf signed a number of bills into law that helped to bring the 2017-18 state budget negotiation process to a close.

The revenue package that will finalize funding of the $32 billion spending plan, which became law in July, relies heavily on borrowing $1.5 billion from the Tobacco Settlement Fund. Also enacted is a gaming expansion bill that legalizes iGaming; creates 10 satellite slot machine locations- the permits for which will be sold in an auction; allows video game terminals at truck stops and regulates fantasy sports betting. All told, these gaming reforms are expected to generate $239 million in the current budget year and $100 million in recurring revenue in future budget years. The deal also includes $500 million in one-time fund transfers; a fireworks tax; and requiring online vendors to remit sales tax.

Notably absent are a number of proposed tax increases that the PA Chamber worked to defeat throughout the months-long budget impasse: an additional tax on natural gas drillers; new taxes on commercial and residential gas users, increased taxes on electric and phone bills; a new hotel tax; and a commercial warehouse storage tax. The PA Chamber opposed these taxes on the grounds that they would have singled out individual industries to close a revenue gap, which negatively impacts economic growth and makes the Commonwealth less competitive.

Despite the progress last week, there was one bill that remained on Gov. Wolf’s desk until Sunday, Nov. 5, after which it became law without his signature – the Education Code bill. With the enactment of this bill, the budget could finally be declared resolved. The legislation contains several provisions that the PA Chamber supports – including an increase of $10 million to the popular and effective Educational Improvement Tax Credit program; along with replacing the current seniority-based teacher furlough system to one that is weighs in teachers’ classroom performance. The PA Chamber has long supported this reform, as it helps to ensure that the most effective educators remain in the classroom to give students a better chance at a high quality education.

After the Education Code became law, our organization issued a statement thanking the legislature for passing the bill because it will improve future outcomes for students. “Among other important components of this omnibus School Code bill is language to remove the archaic and counterproductive ‘last in, first out’ mandate,” PA Chamber President Gene Barr said. “This antiquated system pulled some of Pennsylvania’s best and brightest teachers out of the classroom because seniority was the only factor in determining which teachers should be let go.  As a result, this practice led to gifted, quality educators being forced to leave the classroom simply because they were hired more recently than others. The enactment of H.B. 178 is an important step for the Commonwealth’s education system.  This critical reform will improve the quality of education for current students – and future generations of students – who will benefit from having the best, most qualified and inspiring teachers in the classroom.”

As seen in The Sentinel, a weekly publication of the Pennsylvania Chamber of Business and Industry.

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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 Business™.