Researcher Paul J. Mathison explains governor’s proposal to tax computer professionals

We couldn’t quite believe it when Paul J. Mathison, founder of research firm pjmathison, told us that the Governor was planning to begin taxing computer service professionals for their work.

We understood the reasoning; the budget shortfall statewide, like here in Philadelphia, has called for drastic measures. But what surprised us most was that we hadn’t heard a thing about it.

Included in the Governor’s fiscal year 2011 budget is a proposal to drop the state sales tax from 6 to 4 percent while broadening the tax base to include other professionals currently exempt. Like computer service professionals.

And while we’ve seen coverage of the issue, after the fact, in Pittsburgh, and according to Mathison, a growing interest from technology stakeholders across the state, little has been done here in Philadelphia.

After the jump, we ask Mathison for the details on the proposed tax hike and what technology groups can do to fight it.

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Down with Pennsylvania’s tech tax!

In an informal partnership with Philadelphia magazine‘s new Philly Post daily news blog, Technically Philly will be offering our insight on Philadelphia technology to a broader audience of tech-interested individuals every Tuesday. As is true of so much of our effort, this is yet another opportunity to voice the triumphs and concerns of the community to a broader audience in the city and beyond.

Pennsylvania lawmakers sounded a warning bell last week, predicting a $1 billion deficit if taxes aren’t increased or significant spending cuts executed. And for the first time in close to two decades, computer services professionals are being looked to to help bridge the gap.

Governor Rendell’s proposed 2011 budget includes plans to broaden the tax base to 74 goods and services not currently taxable under the state sales tax, including computing and information technology work.

Call it history repeating itself.

In 1991, with an expected hole in the budget, Governor Casey looked to extend the sales tax to additional professional services, including computer services. Paul J. Mathison, who has analyzed state budgets and their impact on technology for close to two decades, remembers it well.

Read more at Philadelphia magazine’s Philly Post.

Friday Q&A: Steve Welch, candidate for Congress

Steve Welch’s business card could be three times the size of a normal person’s.

The Penn State grad founded the Mitos Group, a biotech company that grew to over 40 employees before it was sold to a Fortune 500 company when Welch was 29. Welch then co-founded DreamIt ventures, an early-stage incubator based in the University City Science Center. And, most recently he just fathered his second child.

But 32-year-old Welch, the new-father-entrepreneur-angel investor, is looking to add another job title to his resume: congressman.

Earlier this month, he launched his candidacy for the 7th congressional district of Pennsylvania with a video on his Web site.

Welch will become the Republican challenger to Democratic representative Joe Sestak. Sestak ultimately may not be his opponent, as he is said to be considering a showdown for the Democratic Senate seat against newly-minted Democrat Arlen Specter.

If elected, he would be the second youngest congressman, behind 28-year-old Aaron Schock (R- Minn.).

True to his past, Welch sees small business as the way out of the recession for the country and for Philadelphia. Welch says the level of spending and government impact on the free market is one of the primary reasons he is running. When we spoke, his second child was still on the way, and the thought that he would be born into debt was a motivation to act.

For the past year, Welch was an Eisenhower Fellow, which allowed him to travel the world taking notes on the best tactics for encouraging small business development.

“In my heart of hearts, I love seeing a need in the marketplace and rushing to fill that need. It’s the greatest rush in the world,” says Welch.

One plan he is fond of, he said, was the tactic of the government matching local early stage investments. That way, firms can decide what is the best investment, and the government can increase the flow of early stage capital with little to no additional labor or bureaucracy.

“We want the best in the world to land in Philadelphia,” he says, “that’s the greatest way to ensure long term success in this region.”

We chatted with Welch about small business in Philadelphia, and the effect of organizations like DreamIt and Ben Franklin Technology Partners.

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Voice your opinion before Ben Franklin Technology Partners funding cuts

Art taken from Ben Franklin Technology Partners' 5-year Plan.

Yesterday, we reported that because of a State budget crunch, Ben Franklin Technology Partners faces the possibility of funding cuts. As the July 1 budget deadline looms, the organization might see a $10 million cut proposed by Governor Rendell or a 60 percent cut in funding proposed by Senate Bill 840.

We asked you, the reader, if any Philadelphia organizations were drumming up support, and we heard your call.

Thanks to a tip from a reader, Technically Philly has learned that the Southeastern branch of Ben Franklin Technology Partners has streamlined ways to contact legislators to tell them how important the organization has been to the region and the state.

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Ben Franklin Technology Partners threatened by 60 percent budget cut

In a restricted budget season, you have to make your case for survival.

Pennsylvania’s Ben Franklin Technology Partners program has earned the state $3.50 for every $1 invested, according to an independent study by the Pennsylvania Economy League for the years between 2002 and 2006, as cited in a Morning Call Op-ed.

In 25 years, the program’s Southeastern Pennsylvania branch — based at the Naval Yard in South Philadelphia – has provided more than $130 million to grow more than 1,600 regional enterprises, but still, lingering in the state Senate is a bill that would cut 60 percent of the body that funds the statewide BFTP program.

“This is an extremely challenging year for the state budget, and difficult decisions must be made,” wrote R. Chadwick Paul Jr., the president and CEO of the Northeastern Pa. arm of BFTP, in the Op-ed in the Call. “But decreasing funding for Ben Franklin would reduce Pennsylvania job creation and job retention, and result in a net revenue loss for the commonwealth.”

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State to lure tech workers to teach high schoolers

Governor Rendell announced a certificate program yesterday that would encourage science, technology, engineering and math professionals to take mid-career breaks to become school teachers.

The plan is to attract current workers to be “residents” in the state’s public schools and assign them a teacher to be their guide as they impart their real-world wisdom to students.

The program would streamline the teaching certification process, made difficult in the wake of No Child Left Behind. The country is due to have a shortage of 280,000 math and science teachers by 2015.

Interested in teaching at your local high school? The Governor’s office provided the following requirements for eligible teaching certificate candidates:
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Friday Tech Links: Philly tax criticism, Webby awards and more

Read about what's going on here after the jump.

In which we link out to the tech news from Philly and elsewhere (when it matters) that slips through the cracks and make it way fun. See others here.

Philadelphians are the highest taxed people in the United States. So says eminent Philadelphia Daily News legacy columnist John Baer.

That’s enough to crack any red-blooded American’s Liberty Bell.

In a column, Baer was railing against Mayor Nutter’s calls to Harrisburg for legislative authority to hike the city’s sales tax from seven to eight percent. The story actually has a good dialogue in the comments section, too — a rarity for Philly.com.

The topic came up elsewhere this week.

Joe Distefano, the Inquirer’s top bearded business columnist, wrote an absolute must read on Nutter’s stalling of and his administration’s subsequent rethinking of continuing the move to “eradicating”the city’s two-pronged business privilege tax.

By no account should you think this is strictly a Philly problem these days.

Fast Eddie Rendell said this past week that if he was forced to push for a hike in the state’s income tax, he would vie for it to return to its normal state three years later, according to reporting from foxy Inquirer state capital correspondent Angela “It’s Greek” Couloumbis.

After the jump, why ET is with a Philly cop above, why 600 people paid $500 to be in Delaware and more than five other itches you need scratched, including our best read story of the week.

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State agencies to “aggressively pursue” $8 billion in high speed rail investments

Pittsburgh, meet Philadelphia. Philadelphia, meet Reading.

A rail system high-speed rail system could connect Philadelphia to Pittsburgh through Harrisburg and a second system could link Philadelphia to Reading if state agencies win funding being set aside by President Obama from the economic stimulus package for high speed rail corridors.

State officials have been practically giddy about the administration’s proposal to invest $8 billion in high-speed rail corridors, including ones in Pennsylvania.

“What was so gratifying today was to have President Obama offer a forward-looking vision for high speed rail that will provide mobility options for the nation and contribute to a much needed strategy for reducing greenhouse gas emissions,” Pennsylvania transportation secretary Allen Biehler said in a press release issued by the Governor’s office.

Officials say that the state’s Keystone Corridor—between Harrisburg and Philadelphia—and an oft proposed link between Philadelphia and Reading, are two projects that could qualify for funding. Biehler told KYW Newsradio that PennDOT will also explore additional services between Pittsburgh and Harrisburg.
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Philly gets no love from latest Ben Franklin Tech Partners investments

At its quarterly meeting this week, the Ben Franklin Technology Development Authority announced that several universities and Keystone Zones will receive state money to help foster the growth of green technologies. Absent in the latest round, however, were any local businesses, though Chester did get some cash thrown its way for its Keystone Innovation Zone.

Now, to be fair, the Southeastern branch of Ben Franklin Technology Partners certainly has shelled out some cash in the past. However, being the Philly cheerleaders we are, its hard not to be disappointed.

In addition to allocating some money for green initiatives, each branch of the four regional branches of the Ben Franklin Technology Partners also discussed where to place the money received from the Alternative Energy Investment Fund.

According to Governor Rendell, the Ben Franklin Technology Development Authority has invested $4 billion since 2003 and has created 27,000 jobs.

Read the full list of recent investments after the jump.

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Rendell unveils Web site to track stimulus spending

A graph on recovery.pa.gov breaks down how stimulus funds will be spent in Pennsylvania.

On Wednesday, Governor Ed Rendell announced plans to ensure accountability for the distribution of $16 billion that Pennsylvania will receive from the federal economic stimulus package. Gov. Rendell unveiled a new Web site to track how funds are spent, recovery.pa.gov, and said he would appoint a Chief Accountability Officer to oversee the process.

“The Web site we’re unveiling today provides a window to this process for everyone to see. The public will be able to track how every dime is spent and for what project and where. We’re committed to making this an open process for everyone,” Rendell said in a press release.

According to the release, citizens will be able to track expenditures that will be updated quarterly and provide input on how funds are invested. A sample template on the Web site shows that individual projects will be tracked by county, and provide details such as completion status, location, project schedule, dollar value of contracts, contractors, and the number of jobs created and saved. The site will be linked to Pennsylvania’s accounting system.

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