Senator Mensch Unveils Economic Development Package

Five bills would spur business investment, job creation

Working to address onerous state tax policies that impede economic growth, Senator Bob Mensch (R-24) is introducing a five-bill legislative package aimed at moving the Commonwealth forward through this tough economy by enabling the creation of new jobs for Pennsylvanians and to help protect existing positions.

"Pennsylvania's financial infrastructure is stretched almost to the breaking point. Our uncompetitive tax policies stymie economic growth and job creation," Senator Mensch said. "It is essential that we act to stimulate Pennsylvania's economy by reducing the tax burden on employers and work with those businesses to keep them here and provide additional job opportunities. We must provide new tools to encourage new investment in Pennsylvania."

Senator Mensch is introducing five bills intended to address several aspects of Pennsylvania's economy as a way to spur economic development and job growth.

Senate Bill 1361 reduces Pennsylvania's Personal Income Tax (PIT) rate – paid by individuals and small businesses -- from 3.07 percent to 2.99 percent.
Senate Bill 1362 implements a Single Sales Factor. Without a 1:1 ratio, Pennsylvania is unnecessarily impacting state-based businesses, especially multiple location retailers.
Senate Bill 1363 reduces the Corporate Net Income (CNI) Tax rate to 8.99 percent in Fiscal Year 2010-11, 7.99 percent in FY 2011-12, and 6.99 percent thereafter.
Senate Bill 1364 uncaps the Net Operating Loss (NOL) carry-forward as a way to encourage new capital investment and new job creation.
Senate Bill 1365 establishes a Career Development Credit program to credit a percentage of qualified employer costs for training employees and upgrading their skills against their Pennsylvania corporate and income tax liability. The program will be capped at $20 million per year and funded through state dollars already being spent on workforce development in the Commonwealth. Eighteen other states offer a job training tax credit.

"Statistics suggest that Pennsylvania is not attractive for businesses. We are 45th in new job creation; we have the fourth-highest unemployment compensation claims in the nation (while having only the sixth-largest population); we have the second-highest CNI in the nation, which has created the "Delaware loophole"; and, we limited the NOL carry-forward, which discourages new capital investment, especially in high tech industries," Senator Mensch said.

"We must focus on turning our economy around instead of simply addressing the immediate impact of the financial crisis we are facing," Senator Mensch continued. "Pennsylvania's tax policies have hurt job growth and rendered us uncompetitive even in good economic times. Now is not the time to protect the status quo, but rather to take bold steps to keep our companies here and to attract new businesses as well."