While most states are finally recovering from the worst recession in decades, and seeing revenue surpluses for the first time in several years, Pennsylvania has missed the boat. And costly corporate tax cuts have a lot to do with it.
Reid Wilson of The Washington Post explains more in a blog post:
While most states are finally recovering from the worst recession in decades, and seeing revenue surpluses for the first time in several years, Pennsylvania has missed the boat. And costly corporate tax cuts have a lot to do with it.
Reid Wilson of The Washington Post explains more in a blog post:
After years of harsh budget cuts, the economic recovery has meant good news for states reaping the benefits of rebounding tax revenue. California has a $4.2 billion surplus. New York has $2 billion in extra cash. Across the country, state revenue is up 3.8 percent over last year, according to the National Association of State Budget Officials.
But in Pennsylvania, the picture isn’t as rosy. As he seeks reelection this year, Gov. Tom Corbett (R) is dealing with a budget deficit of more than $1 billion. So why, when other states are rolling in dough, is Pennsylvania still drowning in red ink?
Corbett’s critics say tax cuts the governor pushed through the Republican-dominated legislature are to blame. In 2011, Corbett backed cuts to the state’s capital stock and franchise tax that cost the state almost $600 million a year. …
All told, Corbett has signed legislation cutting taxes on businesses by about $1.2 billion since taking office.
Wilson also writes that with much of the income growth of the past few years going to top earners, Pennsylvania’s flat income tax has seen less growth than states like California with progressive income taxes that assess higher rates on top earners. As Pennsylvania Budget and Policy Center Director Sharon Ward tells Wilson: “The income growth in Pennsylvania, like the rest of the country, has been at the top. So over time, we’re at a disadvantage.”