Any good stage manager knows how to arrange actors, scenery and props to ensure a smooth production. Pennsylvania is setting the stage with its own measures for industrial production.
   Start by studying lines: Total business tax cuts for 2006- 2007 come to $297 million, aided by incremental drops in the state's corporate net income (CNI) tax. The tax's new formula, signed into law in July, is 70 percent sales, 15 percent property and 15 percent payroll, as opposed to the former mix of 60 percent sales, 20 percent property and 20 percent payroll. The state projects that this category of tax reduction alone will save Pennsylvania businesses $35.1 million in fiscal year 2006- 2007 and $109.7 million in fiscal year 2007- 2008.
   The cuts include retroactively reducing the Capital Stock and Franchise Tax rate from 4.99 to 4.89 mills and increasing Net Operating Loss tax per business cap from $2 million to $3 million. The tax reform also included an increase in the Education Improvement Tax Credit of $10 million from the existing $49 million to allow for more support from businesses to educational programs.
   "The enactment of these reforms is the direct result of leadership on this issue by CompetePA, a coalition of more than 100 of the state's largest private sector employers and business organizations," said Barbara McNees, executive vice president of public affairs for the Allegheny Conference and president of the Greater Pittsburgh Chamber of Commerce, in July. The process included a rebound from Rendell's December 2005 veto of the first reform package. "This was a ground- breaking effort with business leaders from across the commonwealth working together to educate legislators about what can be pretty complex, even arcane, tax laws," said McNees.
   There remains work on the agenda, however.
   "In the coming months, the coalition will reconvene to renew the push for eventual implementation of a single sales factor for the apportionment of the CNI, total elimination of the cap on NOL carry- forwards and a reduction of the CNI tax rate," said Kathryn Klaber, executive vice president of competitiveness for the Allegheny Conference. According to the Conference, by the end of 2006, Pennsylvania will be one of only two states that have a cap on NOL carryforwards. New Jersey is lifting its cap this year, which will leave New Hampshire as the only other state in the nation with a cap on NOLs. And Pennsylvania's CNI tax rate of 9.99 percent is the second highest in the country.