Home   |   Government Affairs   |   Page 2

Media Tags: Government Affairs

Permitting reform critical in cementing PA’s energy leadership

Note: This editorial originally appeared in Broad + Liberty.

World energy markets remain in turmoil as Russia’s horrific invasion of Ukraine invited sanctions and a long-needed rethink of global energy policy. Markets around the world have strongly signaled they are willing to pay a premium for American energy, having seen how Putin has used proceeds from Russian oil and gas to help fuel his invasion.

Pennsylvania is awash with enough energy resources to meet this demand, while keeping prices lower for consumers domestically – we just need the infrastructure to deliver it and the regulatory environment to build.

Our state has huge reserves of natural gas and coal, not to mention decades of knowledge and supply chain in the nuclear, grid management, and renewables spaces. Most importantly, we have a skilled and ready workforce that is ready to get to work to deliver energy safely to homes and businesses and to move it overseas to growing economies that want to trade with free market democracies like the United States.

How will we do it? It will take expanding Pennsylvania’s ability to move gas to market, including through an export facility in the southeastern part of the state. Such a project would mean tens of thousands of man-hours for good-paying jobs in the skilled trades, while helping to grow the economy and providing cleaner, American-made energy to our allies.

A study is currently underway to examine how Pennsylvania could become a leading player in the global energy marketplace by exporting liquid natural gas (LNG). The Philadelphia LNG Export Task Force, a bipartisan coalition comprised of public officials, industry leaders, and building and trades representatives, is conducting a series of hearings to develop a report on the subject, which is expected later this year.

Building an LNG export facility would not only create jobs in the skilled trades; its establishment would also support permanent employment opportunities throughout the entire greater Philadelphia region.

Research demonstrates that every direct job in the natural gas and oil industry generates at least three and a half additional jobs in Pennsylvania. Beyond these workforce opportunities, revenues generated from natural gas exports can also help contribute to the wellbeing of the regional economy.

To make an LNG export terminal a reality, however, we need comprehensive permitting reform.

By one estimate, it takes an average of 4.5 years for energy infrastructure projects to undergo environmental reviews. This process can delay critical projects – like the Mountain Valley Pipeline proposed in Appalachia – and force others to be canceled entirely. When this happens, potential benefits for local economies (like job creation and economic development) go unrealized.

Reforming our state and federal permitting processes is essential for producing and supplying all sources of energy and making progress on emissions reduction.

Legislators on both sides of the aisle in Washington and Harrisburg have recognized that addressing the challenges of fighting climate change while ensuring abundant, affordable energy will only happen when policy promotes innovation and building new projects in the United States. The non-partisan policy think tank Common Good estimates permitting delays on energy projects cost the nation trillions in public health costs, and the Property and Environment Research Center has pointed to slow federal reviews of forest management as a contributor to wildfires plaguing the Mountain West.

The Port of Philadelphia is the most efficient facility of its kind in the nation, and it is a key infrastructure asset to the state’s quality of life and economic climate. Expanding shipments of goods and energy, including through an LNG terminal in southeastern Pennsylvania will be a boon for workers, consumers, businesses, and families, here and abroad.

As bad actors continue to disrupt global energy markets, Pennsylvania can be a leading state among nations in exporting cleaner oil and gas – and in the process, strengthening national security for America and our allies.

Jon Anzur is the Vice President of Public Affairs at the Pennsylvania Chamber of Business and Industry.

Last Week in the Legislature

State budget negotiations remained stalled in Harrisburg last week as the House and Senate stand in recess and are not scheduled to reconvene until September. On the other hand, Senate President Pro Tempore Kim Ward (R-Westmoreland) offered a glimmer of hope, telling ABC 27 news on Friday, “I’m sure at some point in August we’ll be able to get the general appropriations signed…”

Of course, the House and Senate must still reach an agreement on various code bills that are passed in conjunction with the budget and dictate how funding is allocated. Additionally, other budget-related bills (like funding for state-related universities) remain unresolved at this time.

Further complicating the resolution to this year’s budget standoff is the resignation of Democratic State Rep. Sara Innamorato (D-Pittsburgh), who announced Wednesday that she would step down to focus on her campaign for Allegheny County Executive.

Innamorato’s departure leaves the partisan makeup of the House in a 101-101 tie, ostensibly stripping House Democrats of their status as the majority party. However, the rules package adopted in March included a provision enabling the caucus to retain its majority powers in the event of a vacancy until a special election has been conducted. A special election for Innamorato’s seat has been scheduled for Tuesday, Sept. 19, one week before the House returns to legislative session.

In a press conference on Thursday, House Republican Appropriations Chairman Seth Grove (R-York) said that Innamorato’s resignation, paired with the ongoing budgetary gridlock, means that any substantial movement on the budget agreement will likely be delayed until at least October.

Need a refresher on what was included in this year’s budget bill? Click here to read the PA Chamber’s 2023-24 State Budget Rundown.

PA Chamber Testifies on Tax Reforms Amid Budget Talks

Last Thursday, PA Chamber Vice President of Government Affairs Alex Halper testified during a hearing of the Pennsylvania House Finance Committee, urging lawmakers to enact crucial business tax reforms. Halper’s testimony shed light on Pennsylvania’s significant challenges in competing with other states to attract and retain employers, emphasizing the need for pro-growth reforms to reverse this trend. 

Set against the backdrop of ongoing state budget negotiations, Halper cited a recent report from the U.S. Department of Labor ranking Pennsylvania as the fifth worst state in the country in terms of net firm migration. Halper touched on employers moving out of the state and said these factors indicate a bleak economic future for Pennsylvania unless immediate action is taken to improve the state’s business climate, including tax policy: “This is a disturbing trend that has long-term implications and must be addressed,” he testified. 

During the hearing, Halper shared the business community’s perspective on two proposals, House Bill 1482 and House Bill 1483, aimed at accelerating the corporate net income (CNI) tax rate reduction and increasing the cap on net operating loss (NOL) deductions, respectively. 

Halper commended the bipartisan efforts that led to significant tax reform in Act 53 last year. “These measures will make our state more competitive, incentivizing investment and job growth, and create additional economic opportunities in the Keystone State,” he said.  

Halper reported that nine other states have passed further reductions in their corporate tax rates since 2021 and counseled lawmakers to consider these developments in determinations about accelerating the phasedown of Pennsylvania’s CNI rate. “We are in perpetual competition with other states, who we know are moving forward on pro-business reforms as well.” Halper also emphasized Governor Josh Shapiro’s stated support for accelerating the reduction of Pennsylvania’s CNI rate faster than Act 53’s plan. 

Halper also addressed House Bill 1483, emphasizing the need to rectify Pennsylvania’s treatment of net operating loss deductions or, as he described, a “harmful tax on business start-ups.” He noted, “Pennsylvania is an extreme outlier when it comes to the treatment of net operating losses. We are currently one of only two states that cap NOL deductions below the federal limit of 80 percent of taxable income.”  

Halper highlighted the impact on start-up firms and businesses in cyclical industries, stating, “Fixing this flaw will promote future growth, provide more stability as businesses make long-term investment and hiring decisions, and make Pennsylvania more attractive to employers and entrepreneurs.” 

While these tax reform measures are being discussed amidst ongoing state budget negotiations, their fate in the final agreement remains to be determined. Halper’s testimony emphasized their significance for Pennsylvania’s economic future, urging lawmakers to build on bipartisan efforts and prioritize pro-growth initiatives. He highlighted the wide-reaching benefits of these reforms, such as incentivizing investment, stimulating job growth, and improving Pennsylvania’s overall competitiveness. 

As budget negotiations continue, the Pennsylvania Chamber of Business and Industry remains committed to advocating for their inclusion in the final agreement. These twin measures would significantly enhance Pennsylvania’s tax climate, make the Commonwealth more attractive for businesses, and better position the state for long-term economic growth. 

Halper’s full written testimony is available here.