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.