Happy New Year. I wish you all a happy, healthy and prosperous 2017.

The House and Senate started a new two-year session on Tuesday, January 3, swearing in all 203 House members and 25 Senators. The 2017/2018 session that lies ahead will have many challenges, most notably the same one that has plagued this Commonwealth in recent memory – the budget.

By the time the current fiscal year ends on June 30, many are predicting close to a $2 billion budget shortfall that will need to be addressed. What makes up the $2 billion? Annual carryforward pension costs, Medicaid spending and revenue expectations that were below projections, including the $100 million in revenue that was budgeted for internet gaming that was not approved.

So, what does that mean for Pennsylvanians, and more specifically the film industry? A few significant things. While the Governor has stated publicly that he will not seek a broad-based tax increase (i.e. income or sales), I am sure those options will be debated among legislators. An increase in either of those taxes is the only realistic opportunity to generate year over year revenue into the annual budget. One-time opportunities are limited, and many have already been exhausted, like liquor privatization. The direct and REAL challenge and concern will be budget cuts. And this year, ALL tax credit programs will be under the microscope – including the film tax credit. The possibility of the program being impacted is real and PaFIA membership will need to become more engaged and contact their local State Representatives and Senators. PaFIA's leadership is monitoring the situation and will develop a strategy to responsibly and effectively communicate to elected officials the importance of the film tax credit to the industry as well as the individual members and businesses.