Fall 2017

20  • PENNSYLVANIA RESTAURANT & LODGING matters • Fall 2017 LEGISLATIVE CORNER STATE FEDERAL LOCAL State Items BUDGET UPDATE As of the writing of this article, the state still does not have a finalized state budget and chances are when you are reading this, it still won’t be finalized. Fall session began in mid-September and not much of anything will be done until unfinished budget documents are completed. HOW WE GOT HERE The Senate returned to session on July 26, to quickly, but barely, pass the plan previously agreed to by four of the five negotiating parties (Senate Rs and Ds, Governor and House Ds). A variety of funding bills, including the tax code bill that barely passed by a vote of 26-24, are currently awaiting consideration in the House. House leadership and members continue to review the plan and members will not return until their regularly scheduled session day on September 11. In the meantime, the Governor has placed $183 million in budgetary reserves in case those funds are needed because of budget shortfalls. AND NOW FOR OUR STATE CONTROLLED MONOPOLY The PLCB has sent a letter to all suppliers who did not lower the acquisition cost of their products after Act 39 or did not lower them “enough” that the PLCB would be increasing the shelf price of their products by about $1 per bottle. Those price increases took effect on August 28 for 422 items. WHAT DID THE SENATE PASS TO FILL THE BUDGET DEFICIT? The Senate tax code bill includes a variety of tax increases to balance the budget, some of the key items are as follows: • Expand sales tax to online marketplace retailers. This is only an expansion of sales tax, so does not impact online marketplace retailers who would be assessed occupancy tax. • Impose a gross receipts tax of 5.7 percent on the retail sale of natural gas—this tax would be assessed on the end consumer’s bill. • Increase the gross receipts tax on telecommunications, transportation, and electric companies—this increase would be assessed on the end consumer’s bill. • Legalize the sale of fireworks to the consumers, and assess a 6 percent sales tax and additional 12 percent tax on. • Create a severance tax on Marcellus shale. As noted above, the House has been notably resistant to tax increases, so no one knows if they have the votes to concur with the Senate plan. TO ADD TO THE FUN The House Democrats have filed a discharge resolution on HB 1520 (Kim—D, Dauphin). If they receive enough votes, the bill would be “discharged” out of the House Labor & Industry Committee without a vote. HB 1520 would increase the minimum wage to $15/hour and eliminate the tipped wage completely. The Democrats could call up the vote when the House returns to session in September. PRLA is working with our coalition partners and House leaders to explore our options if this threat becomes imminent. Please stay tuned for a grassroots alert if we feel we need to aggressively engage on this issue.