Pennsylvania Balances Its Budget without Raising Taxes

           The Pennsylvania General Assembly, led by its Republican majority, approved a balanced budget for the Commonwealth – on time and without raising taxes, for the third consecutive year.  The $28 billion was signed into law by Governor Tom Corbett, a Republican.

            Pennsylvania’s fiscal year 2013 budget restarts the long phase-out of the capital stock and franchise tax.  This onerous tax, which has been in the process of being gradually eliminated since the 1990s, is in addition to the state’s corporate income tax, leaving the Keystone State with the highest corporate tax burden in the world, thereby making it difficult to maintain or attract business to Pennsylvania.  The budget also increases spending on education.  Pennsylvania now spends more on education than ever before, despite the end of the Obama stimulus that was allocated for education (the end of which made it appear incorrectly to critics that spending had been cut by Corbett).

           Left undone, among other matters, are three major issues: transportation funding, pension reform and liquor privatization.  These issues are expected to be taken up by the legislature in the fall.