Phoenixville Chamber Welcomes Governor’s Secretary of Revenue

Touching on topics like tax evasion, Marcellus Shale drilling in the state and budgeting in a difficult economic time, Pennsylvania Secretary of Revenue Dan Meuser spoke at a recent luncheon.

With approximately 60 people in attendance, Meuser presented to Chamber members Tuesday at , going over the accomplishments of Gov. Tom Corbett’s administration as well as financial goals for the future.

Meuser comes from the private sector and has been with the administration from the beginning. He cited the governor’s promise to hold the line on taxes and went over ways the administration is looking to generate revenue from other sources.

He said the governor hopes to make the state a more competitive environment for businesses, job creators and employees and said one way the state can boost revenue is to go after those who are evading taxes.

“Tax avoidance is what accountants are hired for,” Meuser said, garnering a few chuckles from the audience, which consisted of a few accountants. “We’re going to close loopholes where evasion takes place.”

He said the focus will be on fair administration of tax laws that already exist in the state along with an eye on collecting sales tax.

“Some other states took a very hostile approach,” Meuser said, noting that the Corbett administration hopes that increased awareness and education will help businesses take a closer look at how they collect sales taxes.

He also touched on the governor’s approach to Marcellus Shale drilling in Pennsylvania. According to the presentation, $1.57 billion in state taxes are directly attributable to oil and gas drillers since 2006.

An impact fee proposed by Corbett could generate $120 million in revenue the first year, Meuser said, and the governor hopes to put that in place. A severance tax, however, could chase the companies elsewhere, according to Meuser.

“These industries are far more mobile than you may think,” Meuser said.

He also touched on the ripple effect that oil/gas drillers have on local economies, and said the industries pay the same taxes as other organizations and corporations in the Commonwealth. If an industry causes local hardships, such increased as road construction costs, that industry should pay more, Meuser explained.

“There are no free lunches and that’s where the impact fee comes in,” he said.

Meuser also dispelled a notion that state basic education funding was cut for the 2011-2012 school year. He used a graph to illustrate that the gap in spending from the two previous school years was actually due to federal stimulus funding running out rather than fewer dollars from the state. Total money for Pennsylvania school districts simply went back to pre-stimulus levels, Meuser said.

“Uncle Sam’s dollars were no longer there,” he said, calling the increased funding the past two years followed by a precipitous drop “the stimulus fund illusion.”

Going forward, the governor has instituted a budgetary freeze and agencies will be asked to freeze spending at 3 percent reduced levels. The future looks challenging, with a deficit and mandated cost increases for pension funds, debt service and medical insurance coming in at a $1 billion hike for 2012-2013.

The revenue department will be tasked with figuring out ways to grow and make Pennsylvania a competitive place to be despite a difficult economic environment. Meuser said he anticipates the first half of 2012 will be dismal but there might be an upswing ahead.

“We do think there’s reason to believe that the second half of 2012, we’ll start seeing some movements in the right direction,” Meuser said.

The governor will give his budget address for the 2012-2013 fiscal year on Feb. 7.