Gov. Tom Corbett on Sunday night signed a nearly $28.4 billion budget for the 2013-14 fiscal year, which marks the third consecutive on-time state budget with no broad-based tax increase.
The budget increases state spending by 2.6 percent from the previous budget.
It continues the phase-out of the capital stock and franchise tax, but at a modified pace. The governor had sought to have the tax on business assets eliminated by Jan. 1, 2014, under his budget proposal, but that will now occur by 2016 in order to bring in more revenue to cover rising costs, including pension debt.
The CSFT will drop to 0.67 mills from 0.89 mills in 2014 and then to 0.45 mills in 2015. The modification will be enacted with the tax code, which is expected to be signed early this week, according to the Corbett administration.
The new budget also increases the net operating loss cap to $4 million in 2014 and $5 million in 2015, according to the Associated Press. It is set at $3 million this year.
Technology, bioscience, research and large manufacturers stand to benefit, because this tax break allows job creators to smooth large early losses they incur from current to future tax years.
The governor also touted the budget’s elimination of the inheritance tax on small family-owned businesses, similar to last year’s elimination of the family farm inheritance tax.
Corbett did not see a liquor privatization or transportation infrastructure bill reach his desk along with the budget. Pension reform legislation also failed to garner enough traction in the General Assembly before its summer break.