Lawmakers return to Harrisburg later this month, and the PA Chamber is excited to continue promoting bipartisan, pro-business solutions we are championing to make Pennsylvania a more competitive state for business.
For the latest edition of Chamber Chats, the PA Chamber’s Lindsay Andrews caught up with our Vice President of Government Affairs, Alex Halper, to discuss the organization’s top policy priorities as his team gears up for start of the fall session. A minimally revised transcript of their conversation is below.
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We have had a good start to 2023 and some of the things that got done in the budget. Can you talk to us a little bit about what was achieved on behalf of business and what we would like to see coming up in the fall?
AH: Yeah, we have made some real progress on getting some of the top Chamber priorities as part of the legislative agenda – the priorities that lawmakers, that the governor are talking about.
Things like improving Pennsylvania’s tax code. We had tremendous progress last session to make Pennsylvania more competitive as it relates to business taxes, but a lot more work to do and we have a real opportunity this year, this session, and this fall to make more progress.
What can you tell us about the specifics of that progress? What would you like to see get done?
AH: Last year, for the first time in decades, Pennsylvania reduced its corporate net income tax rate. And we needed to because we had the second-highest rate in the country.
The problem is, while we did that, other states are making pro-business, pro-growth tax reform as well, and Pennsylvania is just not keeping up. Governor Shapiro, when he was running for office, talked about reducing those tax rates more quickly, and expediting those reductions.
We thought that was a great idea; we supported the governor’s call for expediting the reduction of the corporate tax rate. There is legislation in both the House and Senate to do that, and we are going to keep pushing to get that done.
What about the treatment of net operating losses? What can you tell us about that? I know that has been a long-term goal for the business community.
AH: Pennsylvania unfortunately puts itself at a great disadvantage as it relates to net operating losses. That basically means that for businesses that experience losses – they lose money in a year – they are often able to use those losses to offset profits in a future year. Of course, our goal for all businesses is to make a profit but a lot of times, you might have a startup company where they are investing in capital, into people, and they are losing a lot of money.
The tax code, both at the federal and the state level, allows companies to offset those losses and reinvest in their company. Pennsylvania, though, does not treat those losses nearly as favorably as practically every other state in the country.
We basically impose a tax on startup companies, which is the last thing we want to be doing if our goal is to make Pennsylvania the most competitive state in the country and attract new, innovative businesses.
There is legislation, again, in both the Senate and the House, that would make Pennsylvania at least on par with other states for how it treats these losses. This bill passed unanimously out of the Senate Finance Committee earlier this session, and we are working with lawmakers on both sides of the aisle – with the House and Senate and the Governor’s Office – to keep that legislation advancing and hopefully get it done.
Moving on to workforce development because I know that is huge for us. A good, strong, bipartisan issue and I know that we took the lead in the first-of-its-kind Clean Slate legislation, what is next for that? What is next for workforce development in the fall?
AH: It is a challenging issue. Employers continue to struggle finding people to fill open positions. There are many, many reasons why the labor market is so tight, and that means we need to have many, many solutions to address this challenge.
You mentioned Clean Slate, which is about helping to encourage Pennsylvanians who have a criminal record or are recently incarcerated, trying to encourage them back into the workforce. That needs to continue to be a priority. We are supporting legislation that would build on Clean Slate, which provides for automatic expungement of certain lower-level, non-violent offenses.
Similar to Clean Slate, there are efforts to reform Pennsylvania’s probation systems, and we have advocated for some employment-specific reforms to probation.
Things like that—there are no silver bullets to solving Pennsylvania’s and the nation’s workforce crisis. But these are some specific solutions that we think will help a lot of Pennsylvanians but also a lot of Pennsylvania employers.
I also know that permitting reform is critical and an important issue for employers wanting to come to the state. What can you tell us about what is being done to streamline our permitting process and attract business and jobs to Pennsylvania?
AH: It simply takes too long, it is too complicated, and there is not enough transparency in the system of applying for and receiving state permits for projects—if you are looking to expand your facility, for example.
Legislation passed the state Senate earlier this year with bipartisan support to improve those systems, create more efficiency and more transparency. Employers want to know how long it is going to take and how and when to make key investments. This is not about cutting corners as it relates to environmental regulations, this is about understanding and having uniformity with the process and transparency.
This legislation is now pending in the state House, we think it would go a long way toward improving permitting in Pennsylvania and again something we are hoping will continue to advance this fall session.
This is something that has the support of business and lawmakers on both sides of the aisle as well as the Shapiro administration.
AH: That is true. One of the first actions that Gov. Shapiro took upon taking office was issuing an executive order to improve permitting in Pennsylvania. Part of this legislation would codify Gov. Shapiro’s executive order so that it exists in Pennsylvania law long after his tenure as governor is completed. We think there are some very good ideas in there and we look forward to continuing to work with a broad coalition to make this happen.
For more information on these issues, please visit the On the Hill section of our website.