State Budget

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.

PA Chamber Applauds Passage of On-Time Budget, Urges Lawmakers to Build on Positive Economic Momentum with Pro-Growth Policies

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.

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The 411 on the Pennsylvania Budget Process

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.

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Pa. budget prioritizes citizens and businesses

Pa. budget prioritizes citizens and businesses

Jul 21, 2019 | Pittsburgh Post-Gazette

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10 key elements in the Pa. state budget package

10 key elements in the Pa. state budget package

Jun 29, 2019 | PennLive

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PA Chamber Applauds Passage of On-Time Budget, Urges Lawmakers to Build on Positive Economic Momentum with Pro-Growth Policies

PA Chamber Applauds Passage of On-Time Budget, Urges Lawmakers to Build on Positive Economic Momentum with Pro-Growth Policies

Jun 28, 2019 | Tricia Harris

Pennsylvania Chamber of Business and Industry President and CEO Gene Barr issued the following statement regarding the recently finalized 2019-20 state budget:

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Gov. Wolf calls for $34.1B budget, no tax hikes

Gov. Wolf calls for $34.1B budget, no tax hikes

Feb 5, 2019 | Lehigh Valley Business

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Gov. Wolf to present 2019 budget Tuesday

Gov. Wolf to present 2019 budget Tuesday

Feb 5, 2019 | WPXI

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PA Chamber Applauds Governor’s Focus on Workforce Development, Warns Against Policies that Will Hurt State’s Competitiveness

PA Chamber Applauds Governor’s Focus on Workforce Development, Warns Against Policies that Will Hurt State’s Competitiveness

Feb 5, 2019 | Tricia Harris

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:

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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:

  • Expanding opportunities for improving delivery and administration of municipal services: eliminate legal barriers and provide assistance to local governments to deliver services in ways that make practical and financial sense for their respective regions; allow and encourage municipalities to enter public-private partnerships; provide tools for local governments to allow for streamlined permitting so that Pennsylvania businesses and those seeking to locate in Pennsylvania can better compete with other states.
  • Encouraging municipal cooperation and consolidation: Streamline the procedures and provide incentives for consolidating local governments; encourage municipalities to collaborate on delivery of services and consideration and implementation of policies and decisions related to land use, permitting, zoning or any process through which businesses must go to locate or expand a facility.
  • Public Pension Reform: The PA Chamber recognizes the financial burden imposed by unsustainable, outmoded retirement plans and supports efforts to mitigate rising costs in the near term and address unfunded liabilities with as limited an impact as possible on taxpayers. This includes allowing local governments to transition employee retirement plans to a defined contribution retirement plan. These plans have become standard in the private sector as the workforce has evolved, including employee demographics and the tendency for individuals to frequently change jobs, and even careers, during their working life. Both the state and local governments should transition from their traditional defined-benefit retirement plans - which can be unpredictable, unaffordable and outdated - to defined-contribution retirement plans. Moreover, as most of the state’s thousands of local retirement plans serve a small number of employees, consolidation of the various disparate plans could serve to modernize the existing system and create economies of scale that save both taxpayers and plan participants significant money.
  • Reforming binding arbitration: Current state law provides for binding arbitration in the event of a contract dispute between police and fire fighters and their municipal employers and in exchange these uniformed public employees are prohibited from going on strike. The PA Chamber believes binding arbitration can be useful and should remain an option available to resolve disputes. However, it is clear the current system does not sufficiently protect the interests of the municipality as adverse decisions rendered through binding arbitration have become more frequent and a significant cause of escalating costs. The PA Chamber supports reforms to make binding arbitration laws fairer for municipalities, and thereby less costly to taxpayers, while ensuring that police and fire fighters’ rights are protected.