The PA Chamber advocates for responsible state budgets that make wise investments and set the Commonwealth on a path toward fiscal prosperity. This largely means battling back against excessive mandates and tax increases on the employer community, enabling them to invest, hire and grow.
For the second year in a row, the Commonwealth started the fiscal year with an enacted budget in place. Strong revenue collections throughout the year helped to facilitate a relatively smooth budget negotiation process, with lawmakers and Gov. Tom Wolf ultimately agreeing to a $33.9 billion spending plan for the 2019-20 Fiscal Year.
In late June, the PA Chamber issued a statement applauding lawmakers and the governor for getting the budget done on-time without any tax increases. Additionally, we commended the administration and General Assembly for working across party lines to finalize a spending plan that responsibly puts additional surplus revenues in the Rainy Day Fund to help the state better withstand future economic downturns and makes smart investments in key education and workforce development priorities including the Educational Improvement Tax Credit program and Career and Technical Education.
Notably, the final plan did not include two proposals that the PA Chamber had previously expressed concern with. Early in the negotiation process, a proposed increase to the state’s minimum wage along with an additional tax on the natural gas industry were removed from budget discussions. We have repeatedly warned lawmakers that government mandated wage increases have a negative impact on jobs. A recent Independent Fiscal Office report found that the administration’s proposal to increase the minimum wage to $12 an hour would lead to the loss of 34,000 jobs across the Commonwealth. Meanwhile, an analysis from the nonpartisan Congressional Budget Office has found that a $15 rate would lead to an estimated 1.3 million jobs lost, with that number possibly going as high as 3.7 million. Likewise, we continue to push back against efforts to enact a punitive severance tax because it will negatively impact the state’s business climate and send jobs and opportunities to other states in the shale play.
The PA Chamber is urging the Wolf administration and the General Assembly to build on the positive economic momentum the state is currently enjoying by enacting pro-growth policies. Tax reform on the federal level helped to jump-start the nation’s and Pennsylvania’s economies. Comprehensively addressing and streamlining Pennsylvania’s outdated Tax Code will help to further this economic growth. Likewise, we look forward to continued constructive dialogue on ways to address the jobs skills gap and the state’s workforce issues. Moving forward on these two initiatives – as well as reforming Pennsylvania’s burdensome regulatory environment – will send a strong message to job creators that Pennsylvania is open for business and a prime location for future investment.
The state budget process dominates the legislative agenda for the first part of each year. With two legislative chambers and the governor’s office all involved, there is a lot of back and forth between the parties and negotiations can often be confusing and hard to follow. Below is a simple timeline to help understand the annual budget process.
Pennsylvania Chamber of Business and Industry President and CEO Gene Barr issued the following statement regarding the recently finalized 2019-20 state budget:
Pennsylvania Chamber of Business and Industry President and CEO Gene Barr issued the following statement in regard to Gov. Tom Wolf’s 2019-20 budget address:
Within Pennsylvania’s borders are a diverse and vibrant collection of communities where employers set up shop, residents raise families and tourists come to visit. The success of our Commonwealth is directly tied to the strength of its communities and public policy should help communities thrive.
Pennsylvania’s labyrinthine system of local governments is not conducive to strengthening economic competitiveness. The Commonwealth is comprised of 67 counties, 56 cities, 958 boroughs, 1 town (Bloomsburg), 1,547 townships, 500 school districts and 1,961 authorities. Keeping government “close to the people” is certainly an important principle, but too many small governments with diminished capacities, inadequate resources, and limited economic wherewithal do not help advance economic development and job growth within communities. The PA Chamber believes that cooperation among counties and municipalities is part of what is needed to foster more functional and effective local government.
Moreover, the financial wellbeing of many Pennsylvania municipal governments is often harmed by antiquated and unbalanced state laws and regulations, which may necessitate higher costs and inefficient spending. Ultimately, these costs are borne by Pennsylvania residents and businesses, many of whom now live and operate in financially distressed communities. The PA Chamber supports efforts and legislation to help ease the financial burden municipalities face.
Municipal sustainability can be effectuated by: