| Last week, the House and Senate voted on a series of bills that make up the 2022-23 State Budget. As many of you are aware, the budgeting process can often be contentious, and this year was no different. Despite that, the final bipartisan package, though far from perfect, makes badly needed investments in essential programs across our state – largely because of the infusion of federal American Rescue Plan (ARPA) dollars and higher-than-expected state revenues. Here are some highlights of the finalized budget.
Child Tax Credit
The high cost of childcare continues to burden families with the impossible choice between work and their child. To help alleviate this burden, the Pennsylvania Dependent and Child Care Enhancement Program offers a newly created state tax credit aimed at helping families in need of childcare. Eligibility for this tax credit is based on guidelines for the federal childcare tax credit. Families earning over $42,000 a year can expect $180 for one child and $360 for two children. For families earning $15,000 or less, the credit would be $315 for one child and $630 for two or more children.
Whole-Home Repair Program
Affording the cost of needed home repairs is incredibly challenging for many homeowners. In a crucial step forward in ensuring access to adequate housing, the Whole-Home Repair Program funnels $125 million in federal funding in the form of grants to homeowners and loans to landlords to make vital improvements to their properties. To ensure this funding reaches those most in need, only homeowners who make less than 80% of their area’s median income can apply, and landlords will need to meet a set of criteria to be eligible. Look for more information on this program in the coming weeks and months.
Environment
Often overlooked, state environmental programming will receive a boost in funding for the next fiscal year. Key areas of new investment include a substantial $696 million in federal recovery dollars towards clean water, conservation, and our state parks. You can read more about these investments here. In addition, the PA Department of Environmental Protection, along with the environmental programs they manage, received an overall increase of $7 million. Furthermore, the Conservation District Fund, which supports county-level conservation projects, received a $5 million increase in funding.
Corporate Tax Cuts
While most will agree it is the duty of corporations to pay their fair share of taxes, most would also acknowledge that PA’s Corporate Net Income Tax rate, the highest in the country, needed a rethink. This budget gradually decreases the Corporate Net Income Tax rate from 9.99% to 4.99% by 2031. Voices from both sides agreed that PA’s flat corporate tax was hindering investment in our state. With this lowering of the rate, the hope is that PA will see greater investment in PA-based projects.
Elections
A major concern of the majority party in the General Assembly has been the use of private funding for elections. As counties explained last year in numerous hearings on elections, the cost of conducting elections greatly strains county resources. Private donations, for some counties, were critical to their ability to operate the polls in the 2020 elections. To help with the ongoing financial burden on counties, this budget includes $45 million in grant funding to help counties run the elections.
Property Tax/Rent Rebate Program
Many of you have reached out to our office for assistance with the Property Tax/Rent Rebate Program. As part of the budget, recipients will receive a supplemental payment equal to 70% of the regular payment, which will be paid out of ARPA funds. Those already receiving payments do not need to file an additional application. The Department of Revenue will add the supplemental amount and distribute it with the regular payment. The total appropriation for the supplemental payments is $140 million.
For more detailed information from the House Appropriations Committee on the 2022-2023 enacted budget, please click here.
As always, if you need help or have questions about any state matter, please contact our office at [email protected] or 412-343-3870. We look forward to hearing from you!
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