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GOV. CASEY ISSUES STATEMENT ON H.B. 1321

 GOV. CASEY ISSUES STATEMENT ON H.B. 1321
 HARRISBURG, Pa., Dec. 13 /PRNewswire/ -- Gov. Robert P. Casey today


signed H.B. 1321, which amends the 1991 tax act.
 A copy of the governor's Dec. 13 statement follows:
 I am pleased to announce that today I have signed legislation repealing sales taxes on a wide variety of services - taxes which were an unfair and unintended burden on many individuals and business firms in Pennsylvania. Taxes which I never requested, but nevertheless were part of the legislative budget compromise last August.
 Because the national recession continues to drain away our revenues and increase our costs, I insisted, in discussions with legislative leaders, that any bill repealing taxes would have to make spending reductions to make up whatever revenue was lost. When this bill first passed the House, it met that test.
 However, because of amendments added in the Senate to exempt financial institutions from the computer services tax, causing an additional annual revenue loss of $13 million, there is a net revenue loss this year of $3.6 million. I would veto the Senate amendments and sign the balance of the bill into law if I had the power to do so, but our Constitution does not give me that authority. However, our Constitution does require that I restore this revenue loss by reducing spending in the amount of $3.6 million to keep this year's budget in balance, and I have directed the Budget Office to do so.
 In addition, the cost to the public treasury of this bill in the next fiscal year will be $76 million. If the national recession continues on its present negative course, it will be necessary for me to reduce spending next year in that amount.
 Because the service tax repeals I signed today have been the subject of widespread public discussion for the past several months, the resulting uncertainty in the minds of taxpayers has caused many people to withhold state tax payments. This uncertainty ends today with my signing of this bill.
 If we are to keep our budget in balance this year in a time of great economic distress, it is vital that certainty and stability return to our fiscal affairs. Pennsylvania simply cannot balance its budget this year if any additional tax repeals are passed by the General Assembly. I will, therefore, be compelled to veto any additional tax repeal legislation which drains badly needed revenue from vital state programs. Under current recession conditions, such actions are irresponsible and, unless turned back, would only drive our state into deficit and require additional new taxes. I am determined to use the full authority of my office to prevent that from happening.
 /delval/
 -0- 12/13/91
 /CONTACT: Sue Grimm of the Commonwealth News Bureau, 717-783-1116/ CO: Office of the Governor ST: Pennsylvania IN: SU: LEG


CC -- PH028 -- 2471 12/13/91 15:30 EST
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Date:Dec 13, 1991
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