On July 8, 2022, Governor Tom Wolf signed into law the 2022-23 Pennsylvania budget, which totals $45.2 billion in spending, an increase of 2.9% from 2021-22. This budget includes significant investments in critical areas such as education and workforce development, as well as record contributions to the Rainy Day Fund. Budget highlights for the business community include:
• Lowering Pennsylvania’s corporate net income tax (CNIT) from 9.99% to 8.99% this year, with further 0.5% annual reductions until the rate reaches 4.99% by 2031.
• Allowing small businesses to carry forward tax liabilities on like-kind exchanges, as allowed in 49 other states.
• Expanding expense deductions for businesses up to $1.08 million, matching the IRS limit.
• Providing $42 million to pay off outstanding debt in the Unemployment Compensation Trust Fund, avoiding a future tax increase on small businesses
o Providing an additional $350 million to the Workers’ Compensation Security Fund, which pays back debt from prior borrowing.
• Increasing the overall funding to the Department of Community and Economic Development by 63.3%, including a 100% funding increase for workforce development.
• Reducing the amount of Motor License Fund dollars used to support the Pennsylvania State Police by $175 million, allowing those funds to be used for road and bridge projects.
• Increasing education funding by $1.8 billion, including an increase of $6 million to fund career and technical schools.
• Allocating $90 million in federal relief funds to support recruitment and retention of child care workers, and an additional $25 million in state funds for a child care tax credit for working families.
• An official end to PennDOT’s Major Bridge P3 Program, which the Chamber has actively opposed.
“This budget sends a clear message that Pennsylvania and the Harrisburg region want to be a destination for talent attraction and business investment. We are grateful for our legislative delegation and the Governor for prioritizing pro-business growth policies throughout this process,” said Ryan C. Unger, President & CEO of the Harrisburg Regional Chamber & CREDC. “We are proud to have played an active role in advocating for many of these investments and tax reform measures with our partners and stakeholders, which will go a long way in bringing jobs, workers, and families to Pennsylvania, and elevating the quality of life for all.”