UMA member John Bailey is advocating for small businesses in Pennsylvania that could be further hurt by proposals to raise the state’s minimum wage and increase personal income tax.
The owner of Bailey Coach in Spring Grove told the state House Majority Policy Committee on March 4 that his transportation business might not survive if Gov. Tom Wolf’s minimum wage and income tax proposals are implemented.
Like many in the industry, he has struggled to keep his business afloat during the COVID-19 pandemic that pretty much brought ground transportation to a halt after sports and other events were canceled.
Bailey started a niche disinfecting service last year to create an additional revenue stream to support his family-owned business.
‘Devastating’ proposals
He worries that small businesses can’t afford to pay higher wages and personal income taxes right now.
“This would just be devastating to our industry,” he told the committee.
His testimony was part of a Republican committee hearing on the potential impact of Wolf’s budget proposal on businesses in Pennsylvania. Bailey, who is the chair of the Pennsylvania Bus Association and active in the state’s National Federation of Independent Business, was asked to testify at the hearing.
Under Wolf’s plan, Pennsylvania’s flat income tax rate would rise from roughly 3% to 4.5%, but the threshold for tax forgiveness would also increase, reported the York Dispatch. A household of four earning above $50,000, but below $84,000, would see a tax cut and, overall, two-thirds of income-tax payers would pay less or the same, administration officials told the publication.
Tax cuts
The governor’s plan would also increase the minimum wage to $12 an hour to start while moving incrementally toward the goal of $15 an hour. Increasing wages will drive up workers’ comp insurance costs, Bailey said.
“We’ve been through enough as an industry,” Bailey said. “In the last year, I’ve lost 90% of my revenues but I still had to continue to pay all my overhead. So for them to come in and say, ‘OK, now on top of this, we’re going to make you increase wages’ is too much.”
His family has been in the travel and transportation business since 1933 when his uncle, then a school teacher, took students to the World’s Fair in Chicago. That eventually led to his uncle and father opening a travel agency after his dad returned home from World War II. Bailey took over the family in business in the late 1970s and added a bus fleet in 1998. Now, his daughter, Courtney, runs day-to-day operations.
Wolf contends his tax proposals would be more equitable and would increase funding for public education. His budget proposal would also cut the corporate tax rate from roughly 10% to 6% over five years, starting Jan. 1, 2022.
Republican lawmakers have criticized the governor’s budget, describing it as tone-deaf at a time when small businesses and taxpayers are struggling because of the economic impact of COVID-19, according to media reports.
Bailey says Republican leaders asked him to survey the motorcoach industry in Pennslyvania to gather more information about the impact the proposed increased taxes and wages could have on their businesses.
