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State Budget Angst
February 25, 2010

Hello. And welcome to At the Center.

In case you missed it amidst all the distractions from the weather, earlier this month Governor Rendell unveiled his 2010 – 2011 state budget proposal. Not surprisingly, it has created its own kind of storm –at a time when all of us could do without more tumultuous weather!

While I encourage every Chamber member to take a look at the budget proposal and let your state officials know what you think, I do want to lift up one specific item in the budget that deserves your attention and, we believe, your active opposition.

Included within this year’s suggested budget is a proposal that would extend the state sales tax to include professional services.

That’s right. If the Governor has his way, legal fees, accounting fees, marketing fees, advertising fees, engineering fees and on and on, will be taxed.

We believe this new tax will significantly and negatively impact Pennsylvania’s businesses and Pennsylvania’s business climate.

For proof one must look no further than a Pennsylvania Economy League Study that concluded the impact of such a tax expansion is likely to diminish competitiveness over time as businesses relocate or choose other states to set up shop.

And, if this isn’t enough of an alarm, the Pennsylvania State Chamber has noted that 80 – 90% of the costs associated with this tax expansion would be borne buy Pennsylvania businesses –the largest users, by far, of professional services. Certainly the last thing Pennsylvania businesses need is more of a tax burden.

The Lancaster Chamber intends to mount a campaign of opposition to this tax and we ask you to join us in our fight. To learn more about how you can help, check out our website at www.lancasterchamber.com.

As all of you know, developing budgets at a time of soft revenues is no easy task and we respect the challenges facing our state. But we will continue to suggest that the best long-term solution to Pennsylvania’s budget woes is to create a business climate that invites and encourages business growth.

Expanding the state sales tax to include professional services is simply a step in the opposite direction from that goal. Please help us help you by joining with us in our opposition to the proposal.

Until next time, stay informed, stay engaged and stay with us…At the Center.

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