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Pa. receiving nearly $7 million for broadband accessibility

Pennsylvania is receiving $6.6 million from President Joe Biden’s “Internet for All” initiative, Gov. Tom Wolf announced Thursday. 

Of the more than $100 million to be managed by the Pennsylvania Broadband Authority, the funds are the first to be awarded as Pennsylvania looks to make broadband accessible and affordable for all residents. 

Wolf said the state’s lack of affordable, accessible broadband represents one of the largest challenges that is holding back the economy. 

“This $6.6 million is the beginning of a generational change waiting for Pennsylvanians,” Wolf said in a statement. “With guidance from the Pennsylvania Broadband Authority, distribution will be carefully targeted for guaranteed progress.” 

Funding from two programs is included in Pennsylvania’s award: 

  • $5 million from the Broadband Equity, Access, and Deployment (BEAD) Program to expand high-speed internet access by funding planning, infrastructure deployment, and adoption programs. 
  • $1.6 million from the Digital Equity Act to ensure that all people and communities have the skills, technology, and capacity needed to reap the benefits of a digital economy. 

 

The Pennsylvania Broadband Authority will release the funds. The Authority last week released the Commonwealth of Pennsylvania’s Statewide Broadband Plan to address the immediate and long-term needs of state residents. Wolf signed the legislation to create the Authority in 2021. Created through bipartisan partnership, the Authority serves as a one stop shop for all things broadband in Pennsylvania and manages more than $100 million in federal funds as it works to end the state’s digital divide. 

With up to 80,000 Pennsylvanians currently unserved by broadband, the Authority’s Plan focuses on actionable steps to achieve broadband access for all. The Plan looks to improve broadband service infrastructure and availability, digital equity and affordability, device and technology access, and digital literacy and technical support. 

U.S. Department of Commerce Secretary Gina Raimondo said Pennsylvanians know that unequal Internet access equates to unequal access to economic, educational, and healthcare services and opportunities. 

“These grants will put Pennsylvania on the path to equitably achieve high-speed internet service for all residents,” said Raimondo. 

U.S. Senator Bob Casey, D-PA, noted that from rural areas to densely populated cities, many Pennsylvanians are struggling to access affordable, reliable internet. 

 “This ‘Internet for All’ funding will kickstart the commonwealth’s plan to bring high-speed internet to Pennsylvanians so that kids can do their homework, businesses can grow their operations, and workers can have more opportunities for good-paying jobs,” Casey said.

“We have the infrastructure law to thank for this robust investment that will lead to a boost in the economy, increased access to health care and educational resources, and better-connected families and communities.” 

Pa. Sees billions in federal dollars one year after Bipartisan law

Since being signed by President Joe Biden in 2021, the Bipartisan Infrastructure Law has provided Pennsylvania with billions of dollars in support for projects. 

Thus far, investments have been made to improve the state’s infrastructure, support a cleaner environment, and create good jobs that pay well. 

“This $7.9 billion infrastructure investment is really an investment in people,” said Gov. Tom Wolf, who on Tuesday joined White House Infrastructure Coordinator Mitch Landrieu to celebrate the anniversary of Biden’s historic investments in important infrastructure projects in Pennsylvania and across the country. 

For Pennsylvania, the investment includes funding for the following critical projects: 

  • Amtrak routes on the Eastern Seaboard 
  • Addressing aging infrastructure of the Philadelphia International Airport 
  • Replacing and repairing more than 7,540 miles of highway and 3, 353 bridges in poor condition 
  • Providing eligible families $30/month off their internet bills through the Affordable Connectivity Program 

The Bipartisan Infrastructure Law is the largest federal investment in infrastructure in decades, and Pennsylvania has received in total the following: 

  • $58 million for clean school buses 
  • $62 million to improve electric vehicle infrastructure 
  • At least $100 million for broadband and internet expansion 
  • $119 million for airports 
  • $208 million for clean energy and energy efficiency projects 
  • $240 million for clean drinking water 
  • $349 million to cap orphaned wells and reclaim mind lands 
  • $614.8 million to improve public transportation 
  • $1.1 billion to improve infrastructure resilience and prepare for floods and extreme weather events 
  • $5.2 billion for road and bridge projects 
  • $110 billion for ports and waterways. 

“It’s an investment in safe travels to work, family, and friends; an investment in a secure supply chain, the food we eat, the water we drink, and the air we breathe,” Wolf said. “I am grateful for President Biden’s leadership and this bold investment to build a better future for all Americans.”

Thinking of selling your business? Here’s why now might be the best time.

Business owners looking to sell or transfer their business to a family member may have some tax decisions to make if the Biden administration gets its tax code revisions through Congress this year.

Don Petrille, senior lawyer with High Swartz, Doylestown, said the 2017 Tax Cut and Jobs Act created a lot of exemptions for business owners. However, many of those could go away by 2026, if not sooner.

The Biden administration’s American Jobs Plan would change the current Step-up in Basis law that Petrille explains using stock purchases as an example. “If you buy a stock at $10, that is your basis. If it appreciated to $15, your capital gain is $5,” he said. “If you give the stock to someone, they get your basis. So, under the current rules, the basis is based on what it is worth (when bought).”

That relates to selling a company. If an owner sells a company, the basis is what it is worth when it was started. Under the Biden proposal, the basis would be what the company is worth when sold. That will increase capital gains taxes.

John Reed, partner with Barley Snyder, Lancaster, expected capital gains to increase last year. “We all think change is coming, but we don’t know when.”

The takeaway, he said, “if someone is thinking about retiring, they should do it now when we know what the rules are.”

Colin Keefe, partner with Fitzpatrick, Lentz & Bubba, Allentown, agreed. “It’s a good time to sell because we believe taxes will go up in 2022.”

Reed said succession planning comes with many challenges. The proposed changes could make the financial challenges even greater.

“There is risk inherent in this,” he said. “If (the owner) needs to get money out of the business (to live on), he may sell to others and rely on monthly income. There is risk in that,” he said. “You hand control over to someone else and you no longer have control over the running of the operation.”

Petrille said owners have to take a holistic approach to keep the business going. “You have to look at what the departing owner is taking with him; his knowledge, vendor relationships, and what he contributes daily to the operation. How are you going to finance that?”

Insurance can offer some protection, he said. It can be used to retain people who can run the business or to get through rough times during the transition.

Many entrepreneurs will use a self-directed IRA to start a business, he said. The ownership is then tied to that. The Setting Every Community Up for Retirement Enhancement Act (SECURE) of 2019 says if you inherit an IRA, or a business funded by one, you have to liquidate it and pay income tax and penalties or pay income tax on the money over a 10-year period.

“This is also integrated with estate planning because you own a business and that business has value which is taxed by Pennsylvania,” he said. “So, you need to have liquidity to pay the taxes owed nine months after the person’s death.”

Inheritance tax now stands at 4.5 % for children and 12% for siblings.

“Business owners are perceived to be wealthy,” Petrille said. “But wealth doesn’t always mean you have liquidity.”

Consider the construction worker who starts his own business using his personal truck, he said. The basis for this business is zero. But, as the business grows, and the owner hires more workers, buys more trucks and maybe even establishes a shop, the business value goes up. And though the value has increased, there may be no extra cash flow. If the owner sells the capital gains would be on the basis of zero.

If the Biden plan is passed, the basis would be on the value of the company at time of sale. “So, if the business is worth, say $10 million, the taxes could total $4 million. Where do you get the cash to make the transaction?”

Keefe said it is a good time to sell if a business owner is thinking of retiring. “There are lots of buyers right now and the interest rates are still low.”

Biden’s tax plan is in committee. The proposed $4 trillion of new federal spending over 10 years will be partially funded with higher taxes on individuals and businesses. Members of the House and Senate have put forth bills that include everything from increases in capital gains and corporate income taxes to new individual and business tax credits, according to the Tax Foundation.

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