How the Governor’s Proposed Budget Could Impact Architects’ Interests

The governor has revealed his proposal for a $37.837 billion General Fund budget for the 2021-2022 fiscal year, an increase of $3.788 billion or 11.1 percent. Under the banner of “Back to Work PA,” formerly “Restore PA,” the governor’s proposal champions targeted investment into the economy and workforce. In his budget address, delivered virtually February 3rd, Governor Wolf also emphasized a commitment to more funding for education and infrastructure.

AIA Pennsylvania’s government affairs team will be closely monitoring budget discussions between the house, senate, leadership, and governor. Our focus is on the impact of these priorities on architects’ practice, the construction industry, and Pennsylvania’s infrastructure, including funding for public projects, school construction, and environmental impacts.

A few of the key elements of the proposal that we will be watching closely as budget negotiations ensue:

Infrastructure, environmental protection & the energy economy

  • Expansion of the Redevelopment Assistance Capital Program (RACP) by $1 billion to include grant availability for lead and asbestos remediation projects within schools.
  • Proposed investments in greenhouse gas abatement, energy efficiency, and clean and renewable energy program.
  • Dedicated proceeds to help contributors to Pennsylvania’s economy in the industrial and commercial sectors to reduce their greenhouse gas emissions (see RGGI).

Taxes, economic recovery & workforce development

  • Substantial changes to Pennsylvania’s tax system including a bump in the personal income tax as well cuts for Pennsylvania’s lowest-income households and larger corporations. Most small business owners would likely pay more, according to NFIB. “Nationally, about 92% of small businesses are registered as Subchapter-S income tax filers who pay their business taxes at the Personal Income Tax (PIT) rate. Here in Pennsylvania, Subchapter S businesses – which are also called passthrough entities – pay the current PIT rate of 3.07% on bottom line income. For example, pass-through businesses include LLCs, Partnerships, Sole Proprietors, and S-Corps. “
  • $3B to workers and businesses to stabilize the economy and recover from the COVID-19 pandemic.
  • $1.5M in awards to the Partnerships for Regional Economic Performance Network, Small Business Development Centers, Local Development Districts, and Industrial Development Organizations for purposes of incentivizing these partners to collaborate with institutions of higher education to assist businesses in their economic recovery.
  • Funding to develop and publish reports identifying the licensure challenges of immigrants, veterans, military spouses, and out-of-state workers.
  • The proposed increase to the state’s minimum wage.

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