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PLNA e-News: Protecting Values In Pennsylvania

State Budget Not Bad for Green industry

Sunday, April 9, 2017   (0 Comments)
Posted by: Gregg Robertson
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BudgetHARRISBURGOn February 7, 2017, Governor Wolf announced a budget for fiscal year 2017-2018 with no general tax increases, a few “revenue enhancements” (tax and fee increases) and savings from major departmental consolidations and program eliminations. The budget covers an anticipated $2 billion budget gap. Below is breakdown of those budget items of greatest concern to the green industry.

Department of Agriculture - The Department of Agriculture (PDA) received an increase in its basic operating budget of 7.6%, which should keep existing regulatory and inspection programs functioning at current levels. PDA regulates the green industry primarily through the Plant Pest Act and the Pesticide Control Act.

The Department did see a cut of about $6 million in other programs, such as agricultural research, hardwoods promotion and other marketing programs. In addition, state support through PDA to the University of Pennsylvania veterinary school was eliminated, saving $30 million.

Penn State Extension - Penn State Extension and Research was funded at the same level in the coming fiscal year as in the current year, or $51.8 million. While the this may seem to be victory in a budget that saw many programs eliminated in the Department of Agriculture, flat funding for Extension will mean that some programs and staff positions will be cut due simply to rising payroll, health care and pension costs.

New Taxes - While there were no general tax increases, there are some items that are now exempt from sales taxes on which Wolf is now hoping to collect sales and use taxes. Wolf is proposing that the exemption on software and computer services be eliminated. He has proposed several other exemptions that may not affect green industry businesses, such as the sale of food to airlines.

There also are several changes in how businesses must calculate their tax liability, such as with net operating loss carry forward. You should consult your tax advisor on how these changes might affect your state tax liability.

Wolf also has proposed a natural gas severance tax again this year.

Green Infrastructure - Funding for green infrastructure projects will receive a modest boost in new funding. Of a $15 million bond issue to fund agricultural runoff programs and several other environmental priorities, $2 million will be set aside for the planting of riparian buffers.

Minimum Wage - Wolf has proposed increasing the state minimum wage from its current $7.25 per hour to $12 per hour. While not formally a part of the budget, Wolf used this opportunity to announce his intentions. A hike in the minimum wage would require that separate legislation be passed by the General Assembly.

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