On February 9th, Governor Rendell outlined his 2010-11 budget proposal to the Pennsylvania General Assembly.

More detailed information is available on Pennsylvania Bio's website, click here, and on the Pennsylvania Bio Community.

Overview:

The budget proposed on February 9th is a $29 billion budget, which includes nearly $2.8 billion in federal American Recovery and Reinvestment Act (ARRA) funding.

The budget reflects an increase of $1.15 billion or 4.14%.

As part of the budget, the Governor has called for the creation of a Stimulus Transition Fund, to help fill future budget gaps when the federal stimulus funding expires. This new fund will draw revenue from several sources, including:

• A natural gas severance tax;
• A tax on cigars and smokeless tobacco;
• The reduction and broadening of the sales & use tax: reduction to 4% but eliminating 74 exemptions;
• Implementation of combined reporting for business taxes, but reduce the CNI and uncap the NOL and move to 100% sales factor apportionment; and
• The elimination of the vendor discount for on-time sales tax payments.

Pennsylvania Bio has the Budget in Brief and the list of the proposed sales tax exemptions to be eliminated, along with other budget documents, posted on our website and on the Pennsylvania Bio Community.

The Governor noted in his budget address that federal action is required for some of the funding his budget relies upon. President Obama has requested Congress pass an enhanced Federal Medical Assistance Percentage (FMAP) that was part of the stimulus. The Governor's Medial Assistance budget relies on the nearly $850 million that an enhanced FMAP would provide to Pennsylvania. Without this funding, the Governor indicated that he would have to revisit his budget proposal.

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