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Harrisburg – Pennsylvania manufacturers will get to keep $1 billion from an old tax break that the state Supreme Court recently declared unconstitutional, officials said last Monday.

At issue is the state’s embattled Capital Stock & Franchise Tax, which is now in the process of being phased out, and an exemption that through 1998 allowed companies to reduce their liability by subtracting the values of their property, payroll and sales used for manufacturing in Pennsylvania.

On a court challenge filed by Pittsburgh-based PPG Industries Inc., the state’s high court ruled in November that the exemption unconstitutionally discriminated against interstate commerce by giving greater tax breaks to companies that operate exclusively in Pennsylvania.

In 1999, responding to a separate ruling by the justices, state lawmakers extended the exemption to Pennsylvania companies with manufacturing operations outside the state. That modified version of the tax break remains in force and was not affected by the latest ruling.

Under the ‘remedy’ to the November ruling that administration officials unveiled at a private meeting with manufacturing lobbyists last week, companies that agree to waive any claim to a pre-1999 exemption or drop outstanding appeals involving the exemption will not have to pay any additional tax.

The administration estimates the value of those avoided taxes at $1 billion, according to state Revenue Department spokeswoman Deb Snyder.

About 10,000 companies are affected by the manufacturing exemption, said Dan Hassell, the department’s deputy secretary for fiscal policy.

The Supreme Court had ruled that the state should pay restitution to companies that paid the tax or collect back taxes from companies that benefited from the exemption. Hassell said no restitution was warranted, since the companies that appealed believed they were entitled to bigger exemptions, and that any attempt to retroactively collect such old taxes would bog down the state in litigation.

‘There’s substantial doubt that we really could collect that money because so much time has elapsed,’ he said.

Word of the new policy surfaced when the Pennsylvania Manufacturers’ Association issued a statement praising it, even though Gov. Mark S. Schweiker’s administration never announced it.

‘Faced with an unwelcome court ruling and a dire threat to Pennsylvania’s economic health, Mark Schweiker and his Revenue team came through with flying colors,’ PMA Executive Director Jim Panyard said in the statement.

The PMA, which has been highly critical of Schweiker’s budget-balancing proposal to slow the phaseout of the Capital Stock & Franchise Tax, said applying the tax retroactively would have been catastrophic to the state’s struggling manufacturers.

‘Our tax situation is already disadvantageous to Pennsylvania’s competitiveness,’ said PMA spokesman David Taylor. This ‘will prevent things from getting much, much worse.’

Former Pitt. NAACP Exec. Denied Unemployment

Pittsburg —Louise Craighead-Jenkins, a former executive director of the Pittsburgh branch of the NAACP, is not entitled to unemployment compensation because she voluntarily left work without sufficient cause, the Commonwealth Court has ruled.

Craighead-Jenkins started work in December 1998. Six month later, a conflict arose between Craighead-Jenkins and the NAACP board secretary. The board resolved things in favor of Craighead-Jenkins.

After another incident, the board of directors told Craighead-Jenkins to ignore the secretary’s interference.

On Jan. 10, 2001, Craighead-Jenkins resigned. She worked until February 2001 to complete business she had started, according to the opinion.

She was awarded benefits originally, but a referee reversed that decision. The Unemployment Compensation Board of Review affirmed the reversal, finding that Craighead-Jenkins could have addressed her concerns with the entire board of directors, rather than leaving.

The Commonwelath Court sided with the UCB, finding that Craighead-Jenkins “failed to make a good faith effort to preserve her employment.”

Federal Court Says Insurance Beneficiary Lacks Standing To Protect Deceased’s Privacy Privilege