HARRISBURG, July 9, 2021 — Last week, Governor Tom Wolf signed into law Pennsylvania’s state budget, a bipartisan spending blueprint that the National Federation of Independent Business (NFIB) supported. The final $40 billion budget was a vast improvement from Gov. Wolf’s original proposal in February, which included a $7 billion Personal Income Tax (PIT) increase on the backs of small businesses. NFIB fought back, and small businesses are the winners.
“When Gov. Wolf proposed a minimum wage of $15 per hour, in the middle of a pandemic, NFIB fought back,” said NFIB State Director Greg Moreland. “When Gov. Wolf imposed arbitrary and unpredictable restrictions on small businesses, NFIB fought back. Small business’ voice was heard in Harrisburg, but NFIB will keep fighting.”
“Gov. Wolf started the year off with a thud, calling for a 46 percent increase in PIT, a severance tax on natural gas drillers, a $15 minimum wage, recreational marijuana, and entrance into the Regional Greenhouse Gas Initiative (RGGI), all while overspending to the tune of $903 million last year,” continued Moreland. “All this after Pennsylvania had imposed some of the most draconian restrictions in the country.”
“Now that the budget is complete, there is no increase in PIT, no severance tax, no increase in minimum wage, no recreational marijuana, and no entrance into RGGI…yet,” said Moreland. “Thanks to small business advocacy organizations like NFIB, and its partners in the business community, the voice of the small business owner was heard. No new fees, no new taxes.”
“This bipartisan, sensible, and unflashy budget will, hopefully, set us up for success in the years to come, as we are now prepared to deal with structural deficits,” added Moreland. “Ultimately, the 2021-22 budget is a solid framework that prepares us for the future, and there is still work to be done.”
The new budget shows fiscal restraint to prevent tax increases in the future. While stashing $2.52 billion into the Rainy-Day Fund, the General Assembly was able to preserve over $5 billion of federal relief funds. While money is never safe in the hands of the government, there is optimism that when the General Assembly resumes session in September there will be real conversations on how to help our struggling small businesses.
Notably, this year’s budget package rescinds the PA Overtime Rule, which far surpassed the income thresholds set in January 2020 by the Federal Overtime Rule. Under Wolf’s PA Overtime Rule, the current federal income levels of $35,568 would have increased to $40,560 on October 3, 2021, and to $45,500 annually on October 3, 2022. That is three increases in less than three years, all as small business owner are struggling to recover from the pandemic and find workers who will fill vacancies in their shops.
For more than 75 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, please visit nfib.com.