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Governor’s Proposed Budget

As I outlined last week, our caucus has identified several key restorations that we hope to make and have also identified budget savings that we believe will allow us to make smart investments in the programs and services that we believe are important to our residents. In the next few weeks, I hope to provide additional information to you on how we intend to realize these savings.

Although not part of the proposal that we outlined last week, the Senate Democrats have long been advocates of closing the Delaware loophole. It is part of the Tax Fairness component in the PA Works Plan. Pennsylvania has one of the highest corporate net income taxes in the nation, but 70% of our corporations do not even pay it because of the Delaware loophole. Imagine how competitive we could be if all corporations paid their fair share in the Commonwealth? Sources estimate that PA loses $450 million a year because of this loophole.

The Delaware loophole works like this: A company in Pennsylvania transfers the ownership of its trademarks, copyrights, patents, etc. to an investment company in Delaware. The PA company earns $100 million at its PA locations, but then pays the investment company in Delaware $100 million for the use of the trademarks, copyrights, patents, etc. Now, the PA company has no income – and, therefore, no tax liability. And the Delaware company? An exemption in Delaware law provides that the company does not pay any state income tax in Delaware either.

The loophole forces the state to rely more on taxpayers and small business owners – all of whom are already struggling to recover from a recession. Supporters say that the loophole is a tool that allows the companies to avoid that high corporate net income tax rate. They state that it allows a company to reduce taxable income and makes it competitive and financially viable to stay in PA. My question to those supporters is isn’t that what we want all residents and small businesses to be able to do? Isn’t it in the best interest for all taxpayers in the Commonwealth to be competitive and to make it financially viable for them to stay in PA? Sure, we would all like to avoid high tax rates – but the reality is that there is a cost to providing state services and programs, maintaining our roads and bridges, and protecting the health, safety and welfare of our residents. Shouldn’t that cost be spread across all parties so that it is as fair as possible for taxpayers?

We know that we must live within our means, but we can accomplish budget savings to provide more in this year’s budget without any service cuts and without new taxes. As I have stated before, this will be our focus throughout this budget process. Shouldn’t the Delaware loophole be one of the first policies that we look at in this discussion?

Transportation Funding Advisory Commission

Did You Know…

Did you know Pennsylvania has the highest percentage of deficient bridges in the United States? According to a report released in March by Transportation for America, more than 25% of bridges in the state are structurally deficient.

Late last week, Governor Corbett established the Transportation Funding Advisory Commission (TFAC) to develop long-term solutions to the state’s transportation funding problems. The 36-member commission will be chaired by PennDOT Secretary Barry Schoch. The Commission’s first meeting was held yesterday, April 25th, and they will continue to meet through August 1st when recommendations are due to the Governor.

To keep abreast of the TFAC meetings, review the materials that they are reviewing, and to comment yourself – visit the TFAC website at You can also comment directly by e-mailing the commission at

Civil War Living History Weekend

Civil War Living History Weekend April marks the 150th anniversary of the start of the Civil War (1861-1865) and the Andrew Carnegie Free Library & Music Hall has planned an entire day full of activities for this Saturday, April 30th. The event examines various aspects of a defining chapter in our country’s history and is something the entire family can take part in.

More than a dozen events will be taking place at the library (300 Beechwood Avenue, Carnegie) and at Carnegie Park (201 Cooks Lane, Carnegie). Almost all of the activities are free, including tours of Thomas Espy Post No. 153 of the Grand Army of the Republic. The room contains many rare artifacts dating back to the Civil War and is considered a national treasure. Other activities include exhibits, demonstrations by the Soldiers & Sailors USCT Drum Corps, and Civil War reenactments. Visit the ACFL&MH website for a full schedule.

Summer Job Opportunities

Pittsburgh Citiparks is currently looking for new lifeguard applicants for the summer. If you are interested in becoming a lifeguard, call the Citiparks Aquatic Division for information and registration at 412-323-7928. Lifeguard training courses are being offered most weeks this spring at the Oliver Bath House. The course fee is $60.00 (payment plans available) and you must be a city resident and at least 16 years of age by June 15, 2011 to be eligible for employment. The starting pay rate is $8.35/hour. Call the number above to get started on your application. Citiparks outdoor pools will be open June 16, 2011 to September 5, 2011. Pools will be open through Labor Day as staffing levels permit.

Around the District

This past week was a short week due to the Easter holiday, but still included several meetings regarding the budget and issues that are going to be coming before the General Assembly.

On Tuesday, I had the opportunity to talk with Mark Meyer of Craft Distillery in the Strip District about his interest in seeing changes made to the Liquor Code that would allow his business more opportunities.

Wednesday’s schedule included a conversation with Superintendent Manley and students from Sto-Rox School District about the Governor’s proposed budget and its impact on their district and its students. Under the Governor’s proposal the district would see a decrease of $1.85 million, nearly 10% from last year’s funding levels. School districts facing this reduction would normally have no other choice but to increase taxes, but for Sto-Rox which is facing an aging population and declining tax base – that choice is not a choice at all.

I also met with parents from the Focus on Renewal Family Support Center in McKees Rocks. The budget proposal entirely eliminates the funding for these organizations across the Commonwealth. The Family Support Centers have a philosophy that the most effective way to insure the health development and growth of small children is by supporting the families and communities in which they live. The programs they offer increase the strength and stability of families, increase parents’ confidence and competence in their parenting abilities, and afford children a stable and supportive family environment.

I also continue to receive phone calls and e-mails from many constituents about budget issues, the mandate relief package, the voucher legislation and many other items that may come before the General Assembly this Spring. As always, I encourage you to contact me on these and other issues that are of interest and importance to you.

Fontana Fact

During the Civil War, the Fort Pitt Foundry produced the largest cannon in the world at the time. The famous Rodman Gun was one of many produced by the Fort Pitt Foundry, located near today’s Heinz History Center in the Strip District. The cannon weighed 80 tons and was named after Lieutenant Thomas J. Rodman, commander of the Allegheny Arsenal.

Offices of State Senator Wayne D. Fontana

Civil War Living History Weekend