As lawmakers finalized the FY 2024-25 budget deal and headed back to their districts until September, the PA Chamber is proud to celebrate that we were able to secure long-fought victories on behalf of Pennsylvania’s business community that will improve employers’ bottom lines and make the Commonwealth more competitive!

These victories included progress on our top three legislative issues this session: tax reform, permitting reform, and workforce development. Here’s a quick breakdown of the gains we saw across these key areas:

Tax Reform

The 2024-25 state budget gradually eliminates Pennsylvania’s Startup Tax for new businesses by prospectively improving the tax treatment of net operating losses (NOLs). This 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.

Improving the treatment of NOLs has been a top PA Chamber priority this session, and we’ve worked closely with a bipartisan group of lawmakers to make it happen. Pennsylvania has been a major outlier among the states in terms of its treatment of NOLs, and this change will ultimately align Pennsylvania with the federal standard and the rest of the country, making it a more attractive destination for new and growing businesses!

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.

Permitting Reform

This budget includes significant improvements to state permitting processes that will reduce delays in development and business expansion projects. These reforms will help to streamline the permitting process, encourage investment and job growth, and ensure that newly authorized funding in this budget for the PA Strategic Investments to Enhance Sites (SITES) program successfully prepares business sites for development.

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
• Making it easier and more transparent to track permit applications

Workforce Development

The budget also advances initiatives toward the PA Chamber’s long-term goal of building a skilled, inspired 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
• Increasing transportation funding to help Pennsylvanians get to work

These goals were all achieved through the hard work of the PA Chamber’s experienced and knowledgeable Government Affairs team, through partnerships and collaboration with our members and elected officials. The PA Chamber’s public policy agenda is based on the issues facing the broad-based Pennsylvania employer community. Our team worked tirelessly with lawmakers and Shapiro Administration officials in the months leading up to this successful budget agreement, and we thank them for supporting policies that will make Pennsylvania more competitive. As always, if you have any questions about the budget or any other advocacy issues, please contact our team.