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Chamber Chats: Fall Session Priorities

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.

(Click to view video)

 

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.

What’s in the Fiscal Code Bills?

When the Pennsylvania Senate reconvened on Aug. 30, Senators passed two separate fiscal code bills designed to advance the budget process and drive out the approximately $1.1 billion in state funding that still awaits authorization after Gov. Josh Shapiro signed the main state budget earlier that month.

The larger of these two bills, House Bill 1300, designates funding for a wide array of state programs. It authorizes certain fund transfers and directs support for education, healthcare, and emergency services.

House Bill 1300 provides $295 million in Ready-to-Learn Block Grants for school districts across Pennsylvania, which supporters are calling a crucial step toward supporting quality education and empowering innovation at the local level. The bill also designates $261 million in state aid for community colleges, a two percent increase over last year’s funding levels.

Moreover, House Bill 1300 extends $65.4 million in funding to the Pennsylvania State System of Higher Education (PASSHE) for early repayments on existing debt associated with campus buildings at the Penn West trio in California, Clarion, and Edinboro. The bill also ties state aid for PASSHE to a tuition freeze for academic years 2032-24 and 2024-25, aiming to alleviate the financial burden on students and promote access to higher education.

Additional educational allocations include $70 million in state aid for libraries; $14.5 million in funding for career and technical programs; and $11 million in grants for school safety initiatives in non-public schools. The bill also empowers the Pennsylvania Department of Education to direct up to $7 million in undistributed funds toward school districts under financial distress.

House Bill 1300 also makes notable investments in health and public safety. The bill designates $20 million for counties to support mental health services and increases the state trooper complement by around 400 troopers, up to 4,410, to bolster law enforcement capabilities.

Furthermore, the legislation helps ensure fair compensation for first responders by adjusting state reimbursement rates to the greater of Medicare or Medicaid rates. House Bill 1300 also provides certainty to nursing care facilities by requiring the Department of Human Services to base each facility’s case mix rate on the data used to determine rates for Fiscal Year 2022-23.

Other provisions include the redirection of $150 million from the Game Fund, created by oil and gas drilling rent and royalty payments on state game lands, to the Clean Streams Fund. The bill also raises the payment in lieu of taxes which several state agencies make to rural municipalities to $2.40 per acre and transfers $31 million from the Medical Marijuana Program Fund to the General Fund, reallocating resources to support broader state initiatives.

The other bill the Senate passed on Aug. 30, Senate Bill 757, focuses on two majority caucus priorities excluded from Gov. Shapiro’s enacted budget: the creation of the Pennsylvania Award for Student Success (PASS) scholarship program and an expansion of the Educational Investment Tax Credit (EITC).

Several priority issues Democrats raised in budget talks – including $100 million in supplemental funds for the state’s 100 poorest schools, $10 million in stipends for student teachers, $100 million for school mental health services, and $175 million for the Whole-Home Repairs program – received no allocation under either bill. It is likely these programs will remain a focal point when the House returns to session.

PA Chamber Testifies Before U.S. Senate Panel on Environmental Regulations

HARRISBURG – Today, Pennsylvania Chamber of Business and Industry Director of Government Affairs Kevin Sunday testified before the United States Senate Committee on Environment and Public Works Subcommittee on Chemical Safety, Waste Management, Environmental Justice, and Regulatory Oversight. The hearing, entitled “The Impacts of Plastics Production and Disposal on Environmental Justice Communities,” explored the balance between commerce and conservation.

 

In his testimony, Sunday highlighted the importance of enacting public policy that expands opportunities for all citizens and advances sustainability while supporting economic growth. He emphasized the regressive nature of high energy prices on vulnerable communities and the paramount need for domestic energy development as a means to combat energy poverty.

Sunday outlined Pennsylvania’s significant contributions as a leading producer of energy, electricity, gas, construction materials, food, medicine, and life-sustaining products. He also noted the ongoing efforts in the Commonwealth to establish a circular economy that minimizes water and plastics waste.

“The abundant natural resources of our state have led this country through every major energy transition that has occurred in the past 165 years,” Sunday said.

Sunday stressed the importance of a robust and reliable supply of energy and life-sustaining products, as underscored by the pandemic and recent supply chain shocks. He urged policymakers to consider the economic and environmental benefits of Pennsylvania’s energy and plastics industries, which support over $24 billion in annual economic output and 55,000 jobs, and cautioned against pursuing measures that would constrain this vital sector.

“Limiting domestic output of this industry will produce negative economic and environmental costs and impacts, from raising the cost of goods and services for working families and sending more jobs overseas, to increasing global emissions and an increase in the amount of waste sent to landfills,” Sunday said.

Sunday emphasized the desire for job creation in environmental justice communities and the negative public health consequences of high unemployment. “One of the key criteria in defining an environmental justice community is the percentage of households or individuals in poverty,” Sunday said. “These communities want jobs.”

Sunday also underscored the importance of the state’s plastics and petrochemical industries in manufacturing goods including medical devices, products, vaccines, ammonia, and fertilizer. He highlighted progress in reducing greenhouse gas emissions and the significant energy savings achieved through manufacturing goods from recycled materials. Sunday stressed that plastics remain essential in taking advantage of renewable technologies and reducing emissions.

“Plastics play a key role in renewable technologies and batteries – from light-weighting automobiles to composite components of wind turbines and solar panels, so it is all the more important that we develop strategies for their responsible use and recycling,” Sunday said.

Pennsylvania’s approach to environmental justice, according to Sunday, ensures public participation from impacted communities and produces durable permitting decisions. He urged policymakers to define clear standards that promote fairness and allow communities to thrive.

“As state and federal regulators and legislators define policy goals with respect to environmental justice, the implementation of these goals must come through clearly articulated, objective regulatory standards, established by statute and through a rulemaking process, that are applied fairly and without excessive conditioning of permits and processes.”

The PA Chamber of Business and Industry strongly supports legislative efforts to drive meaningful permitting reform and increase investment in the industry. Sunday acknowledged the bipartisan leadership of Committee Chairman Tom Carper (D-DE) and Ranking Member Shelley Moore Capito (R-WV) and their commitment to enacting permitting reforms.

Sunday maintained that Pennsylvania’s chemicals, manufacturing, and recycling sectors play a crucial role in fostering inclusive and sustainable growth. He cited examples of ongoing projects, such as the International Recycling Group’s zero landfill plastics recycling facility in Erie, Monroe Energy’s refinery in Delaware County, and Shell’s polymers manufacturing facility in southwestern Pennsylvania. These projects not only support economic development but also empower local communities through responsible environmental practices.

“We encourage a balanced discussion that recognizes the important economic benefit of our state’s energy, manufacturing, and chemical sectors as well as any environmental impacts that need to be addressed,” Sunday said.

In closing, Sunday emphasized that strength in these economic sectors is necessary for growth, food security, and energy independence. He highlighted the importance of Pennsylvanian and American-made products in meeting the challenges of climate change and supporting a growing global economy.

PA Chamber Leads Coalition Urging EPA to Withdraw Controversial Water Rule

HARRISBURG – A coalition of 24 state chambers, led by the Pennsylvania Chamber of Business and Industry, has submitted a comment letter to the Environmental Protection Agency (EPA), calling for the withdrawal of a controversial water quality rule which the agency recently proposed.

In its letter, addressed to EPA Assistant Administrator Radhika Fox, the multi-state coalition raises significant concerns about the proposed rule, specifically questioning the data and methodology used in the agency’s decision to classify four additional chemical compounds as contaminants under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

While the coalition expressed support for the establishment of a comprehensive national drinking water standard for certain chemicals, its comment letter highlights several problems with the EPA’s current proposal – asserting that the costs associated with the proposed rule are substantial and likely underestimated.

The coalition cites the potential costs of implementing the proposed maximum contaminant levels (MCLs) for two compounds, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), estimating an annualized cost of approximately $1.8 billion. This figure represents more than double the EPA’s own estimated costs provided in the agency’s economic analysis.

Consequently, the coalition warned that the implementation of this proposed rule could lead to sharp increases in household water costs (up to $1,000 per month) in communities nationwide.

The coalition letter outlines the following key concerns:

  • Insufficient data on occurrence levels at the proposed maximum contaminant level.
  • The introduction of a novel hazard index approach for certain chemicals, raising technical, scientific, and legal questions.
  • Limited understanding of the risks associated with the proposed MCL.
  • The necessity of considering costs and benefits as required by the Safe Drinking Water Act.

Moreover, the coalition indicates that the proposed rule fails to consider the costs of Superfund cleanups, given the pending CERCLA hazardous substance designation for PFOA and PFOS.

As a result, the letter requests the EPA withdraw its proposal and await the outcomes of the ongoing Unregulated Contaminant Monitoring Rule (UCMR) 5 process before proceeding with a regulatory determination. In its conclusion, the coalition letter stresses that these outsized costs are avoidable and urges the EPA to adopt a more reasonable and defensible approach.

The letter is available here and was signed by the following state chambers:

  • Arizona Chamber of Commerce and Industry
  • Greater North Dakota Chamber
  • Idaho Association of Commerce & Industry
  • Illinois Chamber of Commerce
  • Indiana Chamber of Commerce
  • Iowa Association of Business and Industry
  • Kansas Chamber of Commerce
  • Kentucky Chamber of Commerce
  • Maine State Chamber of Commerce
  • Maryland Chamber of Commerce
  • Michigan Chamber of Commerce
  • Minnesota Chamber of Commerce
  • Missouri Chamber of Commerce and Industry
  • Nebraska Chamber of Commerce & Industry
  • New Jersey Business & Industry Association
  • New Mexico Chamber of Commerce
  • North Carolina Chamber
  • Ohio Chamber of Commerce
  • Oregon Business & Industry
  • Pennsylvania Chamber of Business and Industry
  • South Carolina Chamber of Commerce
  • Tennessee Chamber of Commerce & Industry
  • Virginia Chamber of Commerce
  • Wisconsin Manufacturers & Commerce

PA Chamber Testifies on Workforce Challenges in Rural Communities

 

HARRISBURG – This week, PA Chamber Director of Government Affairs Kevin Sunday testified on the ongoing workforce challenges that employers face in the Commonwealth’s rural communities during a public hearing at Penn College hosted by the Center for Rural Pennsylvania.

The hearing brought together leaders from Pennsylvania’s energy and healthcare sectors as well as educators, agency officials, and nonprofit associations. Participants included PA Chamber members UPMC, Coterra Energy, Penn College, Penn State, Shippensburg University, and the University of Pittsburgh. Senator Gene Yaw (R-Lycoming) – who also serves as the Center for Rural Pennsylvania’s board chairman – chaired the hearing.

During his testimony, Sunday emphasized the importance of improving Pennsylvania’s economic competitiveness through favorable tax and regulatory policies. “Our goal at the PA Chamber is to make Pennsylvania the most economically competitive state in the nation. This requires a tax and regulatory environment that encourages investment into the state,” Sunday said.

He also highlighted the need for modernized infrastructure to support economic growth throughout Pennsylvania. “We need modernized infrastructure across the state – from a safe and efficient system of roads and bridges to world-class airports and ports, to reliable gas, electric, and water infrastructure, and, just as important, access to high-speed broadband.”

Sunday also discussed recent legislative achievements, including the Senate’s advancement of comprehensive permitting and licensing reform legislation (SB 350) and tax reform measures (SB 345 and 346) that accelerate reduction of the state’s corporate net income tax and enhance businesses’ ability to carry forward net operating losses into future years.

The PA Chamber also supports efforts to improve the state’s workforce by addressing key barriers such as affordable childcare, occupational licensing requirements, and re-entry into the workforce after incarceration. In his testimony, Sunday reiterated the Chamber’s support for expanding Pennsylvania’s Clean Slate law and efforts to improve childcare for working families.

With Pennsylvania’s population decline being another major concern in the hearing, Sunday’s written testimony cited IRS data demonstrating that residents are leaving Pennsylvania for states with better economic climates. Sunday recommended targeted regional marketing efforts and greater collaboration with local chambers of commerce and economic development groups as a solution to help attract more residents to the Commonwealth.

Sunday urged policymakers to focus on creating an environment that attracts investment and promotes population growth. “We encourage the Center to take a close look at regional economic needs and population migration trends. Reforms to the state’s tax and regulatory structure help everywhere, but it is certainly the case that each region of the state has its own key industries.”

Sunday concluded his testimony by restating the PA Chamber’s commitment to working with stakeholders including the governor’s office, state legislature, and local communities to help move Pennsylvania forward.

Sunday’s full written testimony is available here. To watch his remarks, click here.

2023 Election Recap

Last Tuesday was Primary Election Day in Pennsylvania, and millions of voters cast their ballots to help shape the future direction of our Commonwealth. Here is a summary of the major contests in this year’s election.

 

 Pennsylvania Supreme Court

ChamberPAC-endorsed candidate Judge Carolyn Carluccio (R-Montgomery) prevailed with 53.55 percent of the Republican Primary vote for Pennsylvania Supreme Court. Judge Daniel McCaffery (D-Philadelphia) defeated Judge Deb Kunselman (D-Beaver) in the Democrat Primary.

Judge Carluccio and Judge McCaffery will face off in the contest for Supreme Court in the Nov. 7 General Election. The winner will fill a vacancy on the court, where Democrats currently hold a 4-2 majority. Read more about the race here.

 

Pennsylvania Superior Court

Jill Beck (D-Allegheny) and Judge Timika Lane (D-Philadelphia) were the top two vote-getters in a three-way Democrat Primary for Pennsylvania Superior Court. They will face Judge Maria Battista (R-Clarion) and Judge Harry Smail (R-Westmoreland) in November in a four-way contest in which the top two vote getters will fill two open seats on the Superior Court.

 

Pennsylvania Commonwealth Court

Judge Matt Wolf (D-Philadelphia) bested Bryan Neft (D-Allegheny) in the Democrat Primary, while Megan Martin (R-Cumberland) prevailed in the Republican Primary with 63 percent of the vote against Joshua Prince (R-Berks). Judge Matt Wolf and Megan Martin will compete in the General Election for one open seat on the Commonwealth Court.

 

Pennsylvania House Special Elections

ChamberPAC-endorsed candidate Michael Stender (R-Northumberland) will represent House District 108 in the state House covering part of Northumberland and all of Montour counties, having won the Special Election to replace current state Sen. Lynda Schlegel Culver. Stender received 64.54 percent of the vote. Read more about the race here.

Heather Boyd (D-Delaware) defeated ChamberPAC-endorsed candidate Katie Ford (R-Delaware) in the Special Election to represent House District 163, the seat vacated by former Rep. Mike Zabel (D-Delaware). Boyd won with 60.1 percent of the vote. Read more about the race here.

 

Philadelphia Mayor

Cherelle Parker won the Democratic nomination for Philadelphia Mayor in a nine-way contest, one of the most competitive and historic races in Philadelphia history. She will face Republican David Oh in November. Read more about the race here.

 

Cherelle Parker (D) | 28.7%          Winner
Rebecca Rhynhart (D) | 19.7%
Helen Gym (D) | 18.6%
Allan Domb (D) | 10.2%
Jeff Brown (D)  | 7.8%
Amen Brown (D) | 1.2%
James Deleon (D) | 0.5%
Deliscia Gray (D) | 0.2%
Warren Bloom (D) | 0.2%

  

Allegheny County Executive

State Rep. Sara Innamorato was the winner of a six-way contest for the Democratic nomination for Allegheny County Executive with almost 38 percent of the vote, with her closest opponent garnering nearly 30 percent of the vote. She will face Republican and former PNC executive Joe Rockey in November. Read more about the race here.

 

 Sara Innamorato (D) | 37.6%          Winner
John Weinstein (D) | 29.6%
Michael Lamb (D) | 19.9%
Dave Fawcett (D) 9.7%
Theresa Colaizzi (D) | 2.1%
William Parker (D) | 1.1%

 

Full election results can be viewed at www.electionreturns.pa.gov.

PA Chamber Statement on Senate Passage of S.B. 350

HARRISBURG – Today, Pennsylvania Chamber of Business and Industry President and CEO Luke Bernstein released the following statement after the Pennsylvania Senate voted to pass S.B. 350, legislation that would enact meaningful and necessary reforms to the state’s permitting system:

“We have a generational opportunity within our grasp to advance a significant permitting reform bill that would lead to more jobs, greater transparency, and ultimately, a stronger economy. Senate Bill 350 takes a giant step forward propelling our state to become more competitive.  By building on the governor’s efforts to improve permitting, this measure further helps to modernize, streamline, and add much needed transparency to the permitting process. The PA Chamber is proud to support Senate Bill 350 and be part of the solution that will help Pennsylvania become more competitive. From crafting this bill to ushering it through committee and ultimately the entire Senate, I want to thank Senators Kristin Phillips-Hill and Greg Rothman for their leadership and tireless dedication on this issue.”

Earlier this week, the PA Chamber led a coalition of 68 leading industry associations and chambers of commerce in urging the governor and legislature to enact meaningful permitting reform this session. Moreover, Senate Bill 350’s provisions are consistent with the PA Chamber’s permitting reform plan, an approach endorsed by the Pennsylvania Building and Construction Trades Council in a joint op-ed written by the leaders of both organizations which was published in various outlets this spring.