February 1, 2021
As a preview to the budget address he’ll be delivering on Tuesday, Gov. Tom Wolf held a press conference last week where he discussed his top legislative priorities in 2021. Unfortunately, many of the goals the governor outlined have long been opposed by the business community – including enacting an additional tax on the natural gas industry and enforcing a mandated minimum wage increase to $15 an hour.
PA Chamber President and CEO Gene Barr issued a statement in response that warned of the negative impact of these proposals, and urged lawmakers to instead work collaboratively on policies that will encourage re-investment in Pennsylvania’s fragile economy and job creation.
“There’s no question that the COVID-19 pandemic has created numerous challenges for Pennsylvania’s employers and workforce,” Barr said. “While the PA Chamber appreciates Governor Wolf’s focus on helping Pennsylvania overcome the pandemic era, we do not agree that policies that will increase employer tax burdens and the cost of doing business in the Commonwealth are the best means to achieve this goal. In fact, these proposals will only serve to slow our economic recovery.
“As we approach the one year mark of the virus’s first appearance in the Commonwealth, businesses across a wide range of industries continue to struggle. The pandemic has highlighted the critical role the state’s energy supply and infrastructure has on our economy, as an emphasis on teleworking continues. Pennsylvania’s prolific natural gas reserves have helped to keep energy costs low throughout the state, and oil and gas are vital feedstocks to manufacturing sanitizer, PPE, medical equipment, and are critical to shipping the vaccine - and, most notably, one of the ingredients in the coronavirus vaccines used to deliver the molecule into the body is derived from petrochemicals. Higher energy taxes puts one of the Commonwealth’s greatest competitive advantages at risk.
“We are also concerned about other proposals highlighted by the governor that would negatively impact the state’s business climate. Linking a much needed reduction in the state’s Corporate Net Income Tax – which is one of the nation’s highest – to the implementation of mandatory unitary combined reporting is not the way to move Pennsylvania forward. This complex, overly broad tax reporting system will lead to increased costs putting Pennsylvania job creators at a greater competitive disadvantage. Rather, we encourage lawmakers to enact substantial state tax reforms that are based on the principles of competitiveness, fairness, predictability and simplicity.
“Additionally, the administration’s aggressive proposal to more than double the state’s minimum wage to $15 will increase labor costs and lead to further job loss. As many of our members can attest – especially the small business community – government wage mandates threaten the vitality of businesses and job growth, and this is especially true as they continue to struggle in the pandemic landscape. A report by the nonpartisan Congressional Budget Office found that a $15 minimum wage could lead to as many as 3.7 million lost jobs. Rather than continuing the push for misguided minimum wage hikes, lawmakers should pursue policies that target support to low-income earners without risking jobs.
“As we collectively aim to jumpstart our economy and rebuild the Commonwealth’s workforce, it is counterintuitive to place additional burdens and hardships on the same people we’re relying on to drive our economic recovery forward. In addition to looking at possible funding support, there needs to be a focus on policies that don’t come with a monetary cost but would provide significant relief to job creators – such as much needed targeted liability protections, which would help a multitude of industries including: small businesses, nonprofits, childcare providers, as well as the education and medical communities. While this effort was opposed by legislative Democrats and vetoed by Governor Wolf last session, we are hopeful these much needed protections will be enacted in the near future.”
Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.