Category: E-News – The Sentinel

Last Tuesday, the Pennsylvania Senate Transportation Committee held the first in a series of hearings focused on optimizing the Commonwealth’s multimodal transportation system. The discussion highlighted both the financial challenges and potential solutions for modernizing infrastructure — particularly considering growing concerns over declining gas tax revenue and the need for a sustainable, long-term transportation funding model.

Through the 2024-25 state budget, the state allocated $80.5 million toward public transit and $80.5 to PennDOT for multimodal improvement projects, though Gov. Josh Shapiro has pushed for an annual $282 million increase in mass transit funding. This discrepancy speaks to a broader challenge in Harrisburg: balancing necessary investments with responsible fiscal management.

The PA Chamber submitted testimony to the Committee outlining our views on transportation infrastructure, mass transit, and funding.

 Challenges and Innovations in Transportation Funding

One of the central issues addressed in the hearing was declining gas tax revenue, particularly as more electric vehicles (EVs) enter the market. Doug Shinkle, transportation program director at the National Conference of State Legislatures, discussed how other states are experimenting with alternative revenue streams such as mileage-based fees, EV fees, and user fees for ride-sharing services.

Shinkle pointed out that states like Pennsylvania must explore diverse funding sources to fill gaps in their budgets. He noted that while mileage-based user fees are one option, they are still in their infancy and have yet to generate significant revenue in other states.

Public Transit’s Role in Economic Development

Paul Skoutelas, president and CEO of the American Public Transportation Association, emphasized in his testimony the critical role public transit plays in Pennsylvania’s economy, particularly in urban areas like Philadelphia and Pittsburgh. He highlighted the sector’s resilience through the pandemic, with ridership recovering to about 80 percent of pre-pandemic levels. However, he acknowledged ongoing challenges such as inflation and workforce shortages.

Skoutelas and several committee members discussed how transit systems also play an integral role with economic development efforts, particularly in rural areas where inadequate transportation can limit access to jobs.

PennDOT’s Funding Shortfall and Solutions

PennDOT Secretary Mike Carroll testified about the significant funding shortfall facing Pennsylvania’s transportation infrastructure. He estimated the shortfall is $9.3 billion.

While acknowledging that no single solution can address this gap, Carroll supported the governor’s proposal to allocate 1.75 percent of sales tax revenue to fund public transit. He emphasized that sustainable transit and road maintenance funding is essential for the state’s long-term economic health.

Looking Ahead

The hearing underscored a bipartisan consensus that Pennsylvania needs to modernize its transportation funding system to meet the state’s long-term infrastructure and economic needs. The next hearing, scheduled for Oct. 1, will focus specifically on public transit.

The PA Chamber will continue to advocate for forward-thinking transportation policies that ensure sustainable funding and promote economic competitiveness across the Commonwealth. To learn more about our transportation advocacy, click here.

 

It’s just weeks away! Register today for a table or individual tickets and join us for a night of exceptional networking opportunities and an unforgettable program at our 40^th PA Chamber Annual Dinner. The premier event of the year for business, civic, and government leaders across Pennsylvania will be held Monday, October 7th, at the Hershey Lodge – and you won’t want to miss it!

This milestone event promises to be extraordinary, featuring:

• Headliner Serena Williams – The tennis legend will share her insights and experiences on and off the court, including her success as a businesswoman, venture capitalist, producer, and more.
• Political Highlights – Hear from national leading political figures, including U.S. Senator Marco Rubio and a soon-to-be-announced marquee Democratic speaker, about Pennsylvania’s critical role in the presidential and other key down-ballot races.
• Unparalleled Networking – Connect with top executives, decision-makers, and visionaries from across the Commonwealth in a vibrant and engaging setting.

The 40th PA Chamber Annual Dinner is more than just an event – it’s a bipartisan celebration of Pennsylvania’s greatness as we look to move forward with civility and optimism for what we can achieve together. And as the grandest signature event we host each year, it’s an occasion you won’t want to miss!

Secure your place among the dozens of corporate attendees who have already signed up to join us and sponsor! For more details and to register, visit chamberdinner.com, or contact Carly Dubetsky at cdubetsky@pachamber.org.

In case you missed it … Broad + Liberty  published a new op-ed last week from PA Chamber President and CEO Luke Bernstein outlining the several significant pro-business changes included in Pennsylvania’s 2024-25 state budget and recognizing state leaders (including Senate President Pro Tempore Kim Ward, Senate Majority Leader Joe Pittman, and Governor Josh Shapiro) for their efforts in securing these important wins.

In the op-ed, Bernstein details key pro-growth reforms, including the elimination of Pennsylvania’s Start-Up Tax, the continued phasedown of the Corporate Net Income Tax, and the launch of the SPEED Program to streamline the state’s permitting processes. These reforms are poised to make Pennsylvania more competitive, attract new businesses, and drive economic growth. Bernstein also emphasizes the budget’s investments in workforce development, including funding for career and technical education and incentives for childcare expense reimbursement.

The full text of the op-ed is available here.

Last week, a federal judge in Texas barred a U.S. Federal Trade Commission rule from taking effect that would have banned more forms of noncompete agreements from employment contracts nationwide with retroactive effect.

In her decision, U.S. District Judge Ada Brown in Dallas said the FTC does not have the authority to ban practices it deems unfair methods of competition by adopting broad rules. She had temporarily blocked the rule in July while she considered a petition by the U.S. Chamber and a tax entity to strike the ruling down for the major negative implications the ruling would have had on the nation’s business community. Notably, the FTC’s proposed rule came under fire for the challenges it would present for businesses’ ability to safeguard trade secrets and other confidential information. The rule was set to take effect Sept. 4.

When the FTC initially voted on the ruling in April, it became the subject of a PA Chamber member-sponsored webinar in May. During the event, attorneys from Buchanan Ingersoll & Rooney laid out the implications for businesses and explained what they could do to protect themselves. The PA Chamber also signed on to a national coalition letter in May requesting a stay and delay of implementation of the rule, which made the case that the lack of guidance on the rule created a lack of certainty for employers.

Following Judge Brown’s decision, U.S. Chamber President and CEO Suzanne Clark called the ruling a “significant win in the Chamber’s fight against government micromanagement of business decisions.” Read the U.S. Chamber’s press release praising the decision here.

How will the 2024 General Election results affect Pennsylvania’s business community, and what can you do to prepare for your company’s future? Experts will break it all down at the PA Chamber’s Post-Election Impact Summit!

Join us on Friday, November 15, at the Hilton Harrisburg from 8:00 a.m. to 1:30 p.m. for a comprehensive analysis of the election results, key insights from political insiders and elected officials into the upcoming state and federal legislative sessions, and discussions on the future landscape of business policy.

Registration is now open! For registration and sponsorship details, click here. And, maximize your time with the PA Chamber by attending our “Evening with General Davis Petreus” cocktail reception and dinner the night before at the Harrisburg Hilton. For more information about that event, click here.

Key Topics will include:

Analysis of the 2024 Election: Dive deep into the electoral outcomes, key trends, and national and local governance implications. Expert analysts will discuss the impact on party dynamics, policy priorities, and the political landscape.

The 119th Congress Outlook: Gain a strategic preview of the priorities, agendas, and legislative initiatives expected in the upcoming congressional session. Understand how Congress’s composition will influence policymaking and governance strategies.

The General Assembly’s Pro-Business Perspective: Hear directly from a bipartisan, bicameral group of state legislators about their efforts to advance pro-business policy in the next state legislative session.

Future of Business Policy: Explore the anticipated shifts in business regulations, economic policies, and industry-specific reforms under the new political framework. Industry leaders and policy experts will share perspectives on navigating regulatory changes and fostering economic growth.

On August 21, the PA Chamber Foundation hosted a meeting to update stakeholders about progress made on development of the Keystone Initiative, a guide that will ultimately serve as a long-term economic strategy to make Pennsylvania more competitive.

The meeting featured an overview of Gov. Shapiro’s recently unveiled 10-year economic development strategy, Pennsylvania Gets It Done, including the plan’s assessment of the commonwealth’s strengths, areas of concern, top industry sectors, and five strategy areas.

Attendees were also briefed on responses to a survey of PA Chamber members focused on Pennsylvania’s competitiveness.

Overall, PA Chamber members rate the Pennsylvania economy as “good,” with room for improvement. They stressed that we are not realizing our full economic potential. Respondents said that Pennsylvania needs to be more welcoming to business activity and improve our business climate through permitting modernization, tax reform, and legal reform, among other areas.

This information, along with additional research and data collection conducted during the Keystone Initiative’s Phase 2, will inform the final phase, during which the PA Chamber Foundation, Keystone Initiative Co-Chairs, PA Chamber Policy Council members and other contributors will develop a final report with recommendations to improve Pennsylvania’s competitiveness.

For more information, visit www.pachamber.org/keystone_inititiative/.

See Serena at the 40th PA Chamber Annual dinner in Hershey, too!

 

As we cheer on Team USA at the ongoing Paris Olympics, the PA Chamber is gearing up to welcome a storied Olympian to the PA Chamber Annual Dinner stage – the greatest tennis player of all time and four-time Olympic gold medalist, Serena Williams!

Join us on Monday, October 7, at the Hershey Lodge, where the international sports icon will join PA Chamber President and CEO Luke Bernstein for a fireside chat about her storied career. Serena’s Olympic dominance is legendary. She won three gold medals in women’s doubles—an all-time joint record in tennis, shared with her sister, Venus – and a gold in women’s singles. But just as impressive as her on-court accolades have been Serena’s off-court accomplishments, overcoming adversity, and launching a successful business career!

From Paris to the Hershey Lodge, Serena knows how to deliver – and we can’t wait to hear all about it during a program you won’t want to miss!

For sponsorship and registration information, email Carly Dubetsky at cdubetsky@pachamber.org or visit our website at www.chamberdinner.com!

 

 

Photo credit: Jonathan Nackstrand

Pennsylvania’s nonpartisan Independent Fiscal Office recently issued a research brief that updates its revenue projections against expenditures based on the FY 2024-25 enacted budget. And, according to the IFO, spending is now outpacing revenue and the revenue estimate for the current fiscal year is $320 million lower than the official estimate certified by Gov. Josh Shapiro. This has the office warning that, unless steps are taken to lower spending or boost revenue, the result could be a budget deficit of close to $1.6 billion by next year.

The IFO projects that if education spending increases by 2.4 percent, human services spending increases by 5.2 percent, and personnel-related spending increases by 4.2 percent, the state budget will be close to $50 billion in 2025-26 even though the state is projected to only bring in about $45 billion in revenue.

“For FY 25-26, revenue growth is modest (1.4 percent) due to the ongoing corporate rate cut, the reduction in interest that accrues on General Fund balances (-$240 million) and the deduction of newly enacted tax law changes (-$304 million),” the IFO said in its analysis.

The IFO notes in its analysis that the Shapiro administration has projected that Pennsylvania will get $300 million more in revenue in this fiscal year than the IFO has projected, meaning the deficit would be slightly less (if the administration’s estimates hold true.)

The 2024-25 budget will require about $3 billion of surplus cash to balance, leaving about $10.5 billion in reserve.

The IFO’s analysis warns that the cost of tapping into its reserves to pay for this year’s budget will leave the state with just under $3 billion in general fund surplus at the end of 2024-25. That surplus is on pace to become a $1.57 billion deficit by the end of 2025-26.

The state ended 2023-24 with a $6.6 billion surplus, plus almost $7 billion in the Rainy Day Fund.

To read the full report, click here.

During a panel discussion hosted by the American Bar Association last week, PA Chamber Vice President and General Counsel Megan Martin voiced the business community’s opposition to House Bill 2012, proposed legislation under consideration in the state legislature which would establish Pennsylvania’s first state antitrust law. Other panelists included Michael Finio of Saul Ewing LLP, Tracy Wertz from the Pennsylvania Attorney General’s Office, and William Devinney of Briglia Hundley.

The PA Chamber’s objections to HB 2012 reflect the concerns of a broad coalition of Pennsylvania employers and 13 other leading industry organizations across the Commonwealth.

“[House Bill] 2012 harms consumers and businesses both large and small, adds uncertainty, and increases the risk of frivolous suits in our Courts of Common Pleas,” the coalition argued in a recent letter to state lawmakers.

Martin criticized the one-sided nature of this complex bill in that it was drafted with extensive input from the Office of Attorney General, but that no hearings were held before the bill was considered in the PA House of Representatives.

Martin contended that no members of the General Assembly, to her knowledge, are experts in antitrust, and it would have been incredibly helpful to the process had legal scholars and experts been afforded the opportunity to weigh-in with their expertise and insight. “As with all things in life, we need a balanced approach” to this process, she said.

Martin also criticized HB 2012 for its vague definitions of antitrust actions, which subject Pennsylvania’s employers to severe criminal penalties, including serving up to four years in prison and fines up to $1 million. She explained that the goal is to welcome businesses to Pennsylvania, not to drive them away. She also criticized the bill’s provisions mandating that the OAG will recover costs and fees if successful in a lawsuit, but that businesses will not be able to recoup those costs if they are successful.

Martin explained how the potential for expensive antitrust litigation, including mandatory treble damages, creates a litigation environment that will result in fewer businesses remaining, locating, or expanding in Pennsylvania. She cited the U.S. Chamber of Commerce’s recent study and conclusion that 89 percent of senior in-house attorneys and executives at large U.S. companies have reported that a state’s litigation environment is likely to impact important business decisions at their companies, such as where to locate or do business.

Martin also criticized the bill’s disproportionate focus on the healthcare industry – which she says would be subjected to “excruciating” regulatory oversight. She further pointed out that these healthcare notification requirements are premature, given that the Uniform Law Commission is still drafting model legislation on state Attorneys General’s access to pre-merger notifications and acquisitions. She urged Pennsylvania to wait for these recommendations before pursuing any changes.

“Healthy market competition benefits consumers through lower prices, higher quality products and services. The economic success of our Commonwealth is built on the fact that the market, not the government, maximizes economic efficiency for the benefit of Pennsylvania’s consumers,” Martin argued.

To learn more about the PA Chamber’s advocacy efforts on this issue, please click here.