We believe that the tax threat to credit unions in Pennsylvania will be low in the year 2004. Our state enacted an increase in the Personal Income Tax (PIT) and some other revenue raising and budget tightening measures in 2003. The fiscal situation is also improving as the state's economy rebounds from the recession. Gov. Rendell recently stated that he is unlikely to propose significant revenue raising measures in his 2004-2005 budget message.
Our state has not looked to credit unions for additional revenues. Clearly, our response is that the structure of credit unions dictates the tax treatment that credit unions receive. As member-owned financial cooperatives, we believe that the tax treatment of credit unions by the federal and state laws remains just and appropriate.
