Tax breaks in limbo amid funding fight

Political Notebook

Even as the state Legislature stalls on plans to raise money for this year’s already-passed budget, a series of tax breaks are taking effect that could benefit employers in central Pennsylvania.

State officials said last week that a collection of new tax credits — affecting brewers, blue-collar employers and waterfront developers, among others — will take hold as soon as the Legislature manages to secure funding for this year’s budget. The credits are delayed, Capitolwire reported, as Gov. Tom Wolf’s administration awaits a revenue plan from the Republican-dominated Legislature.

Some of the new tax breaks could have a direct impact around Altoona, including one first proposed by former Cambria County Sen. John Wozniak.

That credit, intended to lure manufacturers back to the state, sets aside up to

$4 million each year for businesses that hire workers at average-or-better local wages and contribute heavily to the tax base. Qualifying employers would have to keep the jobs for at least five years.

Another break, called the Rural Jobs and Investment Tax Credit, would go to lenders who invest in rural employers. The tax credits would benefit those who help develop relatively small businesses in a variety of fields, according to a legislative summary last year.

Even brewers — of which there are several in Blair, Centre and Cambria counties — would see benefits under the new credits. One break now set to take effect would put aside up to

$5 million annually for brewers of all sizes investing in capital and equipment, renewing a decades-old policy that expired in 2008.

There is no upper limit to the size of the brewery that can benefit, meaning major national producers like D. G. Yuengling & Son could apply alongside those like Altoona’s Railroad City Brewing Co.

All those credits were approved last year but set to take effect this summer, in a bid to delay financial impacts to the state. While tax credits can be appealing to developers and employers, they can quickly chip away at state revenues in exchange for hoped-for future benefits.

That becomes a concern when the state remains without a clear source of income, as it does now. The Senate narrowly approved a funding plan that raises some taxes and fees last month, but it has not yet passed the House, where some representatives are pushing for other sources of money.

The dispute leaves the fate of the credits uncertain, at least for now, Department of Revenue spokesman Trevor Monk told Capitolwire last week. Monk said the tax deals will only be issued once the budget is balanced.

With luck, that could happen in the coming weeks, state Sen. John H. Eichelberger Jr., R-Blair, said in a blog post.

“I’m not counting on anything until there’s official notice, but the sooner they take any kind of action, the better,” he said.

Health emergency could open state resources

President Donald Trump’s surprise declaration Thursday that the ongoing opioid crisis constitutes a national emergency could open new avenues for hard-hit states like Pennsylvania to get help.

Trump’s announcement, issued in response to a reporter’s question, was followed by a formal statement from the White House.

“The opioid crisis is an emergency, and I am saying, officially, right now, it is an emergency,” Trump said at his Bedminster, N.J., golf club. “We’re going to spend a lot of time, a lot of effort and a lot of money on the opioid crisis. It is a serious problem the likes of which we have never had.”

That could be good news for Pennsylvania, which in 2015 tallied more than one in 10 of America’s opioid overdose deaths — a rate far exceeding what would be expected by its population.

State officials have fought to release more funds for the crisis: In April, Wolf announced Pennsylvania received a $26.5 million federal grant to fight “the scourge that is heroin and opioid abuse.”

While the White House statements directs “all appropriate emergency and other authorities” to address the opioid crisis, it remains unclear just what will change. Emergency declarations often address specific epidemics or crises — the Zika virus outbreak in Puerto Rico, for example — allowing officials to direct more funds and resources to stamp out the problem.

Trump’s declaration takes care of a key recommendation by a bipartisan commission investigating the nationwide crisis. The commission cited Pennsylvania among its other recommendations, pointing to the state’s new policies aimed at educating doctors and pharmacists as an example to follow.

“(The declaration) would also awaken every American to this simple fact: If this scourge has not found you or your family yet, without bold action by everyone, it soon will,” the commission, headed by New Jersey Gov. Chris Christie, wrote. “You, Mr. President, are the only person who can bring this type of intensity to the emergency and we believe you have the will to do so and to do so immediately.”

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