Following the enactment of the FY 2024-25 state budget last week, Pennsylvania Chamber President and CEO Luke Bernstein issued the following statement:
“On behalf of Pennsylvania’s business community, the PA Chamber thanks the General Assembly and Gov. Shapiro for passing a budget that takes important steps to make Pennsylvania more competitive. This budget includes several key legislative priorities that the PA Chamber has long championed, including eliminating Pennsylvania’s Startup Tax by raising the cap on net operating losses, modernizing our permitting processes, and advancing workforce initiatives. These provisions will help attract new economic opportunities, expedite project approvals so that businesses can grow and create jobs, help employers address workforce challenges, and equip Pennsylvanians with the skills needed for the future.”
Pennsylvania’s 2024-25 state budget addresses several of the statewide business community’s top priorities:
Permitting Reform
The budget includes significant improvements to state permitting processes that will reduce delays in development and business expansion projects. The reforms include allowing employers to work with third-party professionals to help facilitate the review of applications for many key permits, establishing timeframes for responses, and measures for easier and more transparent tracking of permit applications. These reforms will streamline the permitting process, further encouraging investment and job creation, and help ensure that the newly authorized funding for the PA Strategic Investments to Enhance Sites (SITES) Program is successful in preparing business sites for development.
The PA Chamber has worked closely with state legislators, particularly state Sen. Kristin Phillips Hill (R-York), who has advocated for permitting reform for many years, as well as Sen. Lisa Boscola (D-Lehigh), Rep. Martina White (R-Philadelphia), Senate leaders Kim Ward (R-Westmoreland) and Joe Pittman (R-Indiana), Gov. Shapiro, industry leaders, building trades, and other advocates to advance many of the bipartisan permitting reforms included in this budget.
Tax Reform
This budget gradually eliminates Pennsylvania’s Startup Tax by prospectively improving the tax treatment of net operating losses (NOLs), which allows businesses to carry losses forward and deduct them against future profits to reduce their tax liability so they can reinvest in their business and people. This change will ultimately align Pennsylvania with the federal standard and the rest of the country. As a result of this change, Pennsylvania will be a more attractive destination for new and growing businesses.
The PA Chamber has made improving the treatment of NOLs a top priority, working closely with Sen. Greg Rothman (R-Cumberland) and Senate leaders Ward, Pittman, and Scott Martin (R-Lancaster), as well as a bipartisan group of allies that also includes Sen. Ryan Aument (R-Lancaster), Sen. Nick Miller (D-Lehigh), Rep. Paul Friel (D-Chester) and Rep. Josh Kail (R-Beaver). We look forward to continuing this work with lawmakers, including efforts to improve the treatment of existing NOLs for Pennsylvania businesses that invested in the Commonwealth despite a challenging tax climate. The budget also continues the phasedown of the Corporate Net Income Tax, which will be further reduced from the current 8.49 percent rate to 7.99 percent in 2025.
Workforce Development
The budget also advances initiatives to build a skilled workforce. Initiatives include increasing the Commonwealth’s investment in career and technical education (CTE) and making it easier for qualified individuals to become CTE educators; incentivizing employers to reimburse employees for childcare expenses; creating scholarships for students who choose to enter in-demand fields; increasing the Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) fund to expand the availability of workforce housing in Pennsylvania; and increasing transportation funding to help Pennsylvanians get to work.