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.
On February 4, Gov. Tom Wolf delivered his 6th budget address to a joint session of the General Assembly. The administration’s 2020-21 spending plan calls for $36.056 billion in spending – a 6 percent or $2 billion increase over the current year. While the proposal does not call for any broad-based tax increases, Republican legislative leaders in the House and Senate immediately pushed back on the amount of additional spending in the plan.
Following the governor’s address, the PA Chamber issued a statement applauding the governor’s continued focus on working with lawmakers on both sides of the aisle to address the Commonwealth’s workforce issues. We look forward to continuing both our external and internal efforts to identify innovative solutions to addressing the jobs skills gap and removing barriers to work.
The governor’s budget plan also includes proposed changes to the Commonwealth’s tax structure. While not in favor of all of the tenants of the planned changes, the PA Chamber has long advocated for a reduction to the state’s Corporate Net Income Tax rate – which, with one of the highest effective rates in the nation, continues to send a red flag to job creators looking to potentially invest in the Commonwealth. The PA Chamber is encourage lawmakers to follow the federal government’s lead and make long overdue and substantial changes to the Commonwealth’s tax structure. Any reforms should be based on the principles of competitiveness, fairness, predictability and simplicity.
There are, however, some components of the governor’s budget that cause concern – including a troubling proposal to more than double the state’s minimum wage to $15, will hurt job creation and decrease the number of entry-level positions in the Commonwealth. decrease the number of entry-level positions in the Commonwealth.
Additionally, while not directly tied to the budget, the Wolf administration has also renewed calls for an additional severance tax on the natural gas industry. In the week prior to the budget address, the governor again touted his “Restore Pennsylvania” initiative – which would use the proceeds from a severance tax to pay for $4.5 billion in borrowing to fund critical infrastructure projects. More information on that proposal can be found here.
Over the coming weeks and months, we will be keeping a close eye on the budget process – working with lawmakers from both sides of the aisle on those policy issues that we can build consensus on; pushing back on proposals that will negatively impact the Commonwealth’s business climate; and advocating for reforms that will improve our overall competitiveness.
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 in regard to Gov. Tom Wolf’s 2020-21 budget address:
Pennsylvania Chamber of Business and Industry President and CEO Gene Barr issued the following statement regarding the recently finalized 2019-20 state budget:
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: