Unclear Who Would Lose In PA Tax Credit Cut Proposal

Feb 17, 2017

HARRISBURG (WSKG) -- Among Governor Tom Wolf's spending cut proposals for the next fiscal year is a provision to slash $100 million of tax credits. It's still not clear who exactly would be impacted by those cuts. 

Credit Maguis & David / flickr

Tax credits are basically a way for the state to give financial breaks to businesses and organizations that perform some valuable function.

Three of the major categories of tax credit recipients in Pennsylvania are job creation, education, and community development. Those are the ones Wolf's focusing on.

On top of cutting funding for programs that fall under those umbrellas from about $375 million to $275 million, he proposes converting the remaining money into block grants.

Unlike tax credits, block grants don't have designated recipients. Wolf spokesman JJ Abbott said that would give the state more flexibility.

"The idea is to create a system that makes sure these are going to the best programs, instead of just whichever special interest is quickest or most effective in going through the application process," he said.

Abbott noted, it's not an ideal step to have to take.

"This is obviously another part of the budget that reflects the severity of the budget deficit," he said. "I think it's important for people to know that tax credits are not free."

Abbott said the governor has still not decided which programs would be cut. There are 18 on the table, which range from education, to new businesses, to farming, to mining.

The proposal would need to go through the legislature, which is currently reviewing Wolf's budget proposals and will counter with their own plans.

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