In this episode of the GSI Briefing, we are taking a look across the Delaware River to Pennsylvania who recently enacted a plan to dramatically cut its business taxes. Pennsylvania currently levies the 2nd highest corporate tax rate in the US, right behind New Jersey who is the highest. Their decision to cut their rate by 50% over the next decade will position Pennsylvania among the 10 lowest in the country, as well as THE lowest in the Northeast.
When comparing our two states, it is interesting that this year Pennsylvania, a state of 13 million people, enacted a budget of $45.2 billion, an increase of just 2.9% over the prior year. In that same year, New Jersey, a state of nearly 9 million, or 37% fewer people than Pennsylvania, we enacted a budget of $50.6 billion, an increase of 8% over the prior year. You heard that right. Despite having 4 million fewer people than Pennsylvania, New Jersey is taxing and spending 11% more each year.
Both Pennsylvania and New Jersey have projected robust surpluses of at least $6 billion dollars this year. Pennsylvania’s leadership chose to use tax cuts to invest in future growth, and fight inflation. On our side of the Delaware, New Jersey’s elected leaders chose to increase spending, only offering one-time rebates that do nothing to grow our economy long term, or disrupt our continuously increasing tax burden. It’s a clear contrast in priorities.
Joining me to discuss Pennsylvania’s ambitious path to prosperity are Elizabeth Stelle, the Director of Policy Analysis at the Pennsylvania think-tank, the Commonwealth Foundation. In addition, we are honored to have Senator Ryan Aument, a decorated veteran of Operation Iraqi Freedom who also has experience in business. In 2014, he was elected to represent the 36th district with includes northern Lancaster County. Senator Aument, a Republican, is widely credited as a driving force behind Pennsylvania’s bi-partisan tax cut plan which was signed into law by Democratic Gov. Tom Wolf this summer.