The day after Governor Corbett unveiled his FY 2013-2014 Executive Budget proposal, Secretary of the Budget Charles B. Zogby met with Buchanan Ingersoll & Rooney’s government relations group and clients. He described in detail the governor’s $28.4 billion spending proposal and said he is upbeat about the new budget, even with uncertainties in the economic forecast and sequestration looming in Washington, D.C.
“The economy has shown incredible resilience despite the circumstances surrounding slower than expected growth, but we cannot afford political brinkmanship that could undermine progress made,” said Zogby after he was asked about this year’s 2.4 percent increase over last year’s FY 2012-2013 budget.
Zogby outlined the fiscal reform and reinvestment options the governor proposed including pensions, uncapping the liquid fuels tax, privatizing liquor sales and lowering corporate taxes for a third consecutive year.
Part of the reform package Zogby discussed includes changing the pension system for new state employees and teachers in 2015 to a 401(a) defined benefit plan and lowering the multiplier used to determine pensions by half a percent for certain employees. He stressed that the governor’s plan is to phase in the changes so that they do not affect current retirees and those close to retirement.
Zogby also addressed the governor’s proposals for changes in corporate taxes. In addition to continuing the phase out of the capital stock and franchise tax, the governor proposes a multi-year increase in the net operating loss deduction and a reduction in the corporate net income tax over 10 years.
“Right now we have the highest corporate income taxes in the United States and quite possibly the world,” Zogby said.
Healthcare reform, especially in the Department of Public Welfare, was one of Zogby’s greatest concerns moving forward.
“We want to bring more individuals off the waiting lists for services so that when individuals age out of the system, they can still get care in their homes,” he said referring to home and community-based services.
Zogby answered questions about the impact of Marcellus Shale on the economy and the budget stating that, “not only do we have a world-class workforce in Pennsylvania, but we also have the assurance that if you start a new business here, you will have low-cost energy for the foreseeable future.”