Pennsylvania's auditor general, Jack Wagner, is doing a rethink or a "clarification" on his proposal last month to look at taxing credit unions as a way of helping solve the state's budget impasse.

In a letter sent Tuesday to James McCormack, president/CEO of the Pennsylvania Credit Union Association, Wagner wrote that in suggesting taxing non-profits including CUs he did not specifically name CUs in a proposal submitted to Gov. Edward Rendell.

"Nor did I dispute" the value of CUs to the state's economy, wrote Wagner, "or suggest they do not focus on service to their members."

The PCUA in an Aug. 14 letter to Wagner and distributed to lawmakers challenged the state official on lifting the CU tax exemption warning if implemented would cause serious harm to the CU "business model" and the industry as a whole.

It also would be injurious to the state's financial well being considering CUs have already proved their worthiness by coming to the financial aid of thousands of state employees still missing paychecks, said McCormack.

"We were very pleased to get this letter of clarification from Auditor General Jack Wagner recognizing the value that credit unions bring to Pennsylvania consumers," said McCormack. "We also look forward to meeting with the Auditor General and his staff to see how our organizations can work together for the benefit of Pennsylvanians."