Fix the pandemic and get the economy going, our panelists tell President Biden

If there’s one thing President Joe Biden can do in his first 100 days to help the nation’s economy it’s this: get the COVID-19 pandemic under control. That’s the consensus of three panelists who participated in the “Business Impact: First 100 Days” webinar hosted by Central Penn Business Journal and Lehigh Valley Business.

Dr. Lynette Chappell Williams, vice president and chief diversity officer for Penn State Health; Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry; and Andrew Desiderio, Certified Public Accountant and shareholder at Bethlehem-based Concannon Miller, agreed the pandemic, which has put millions out of work, caused the closure of many businesses and shattered supply chains, is the biggest threat to the economy.

But, amid the many challenges surrounding the delivery of the vaccine, convincing a large and wary portion of the public to take it may be the most daunting task.

“The best thing we can do is educate people so that they can make an informed decision,” said Chappell Williams. “It’s important to get the word out to minorities that the vaccine was tested on a diverse group, and that the data shows that the vaccine is safe for all races and genders.”

“We have a lot of work ahead of us,” agreed Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry. While businesses can’t force employees to get the vaccine, they should encourage it with education and incentives, such giving out gift cards to those who get vaccinated.

When asked what infrastructure improvements would benefit the nation’s economy, the answer was making high-speed internet available to everyone.

“We have a desperate need for more information infrastructure,” chamber president Barr said, who would like to see 5G access across Pennsylvania.

Chappell Williams noted that internet and transportation are needed.

“How do we get the vaccine to people without internet and to those with transportation issues?” she asked. Williams said that issues like these are a priority for minorities who face high rates of COVID-19 infection.

Biden’s plan to increase the minimum wage to $15 raised concerns. Such a move would put a lot of pressure on small businesses, who are barely making ends meet, said Desiderio, of Concannon Miller.

Desiderio, who works with small business owners, said a mandated $15-an-hour minimum wage would hurt, but coming in the middle of a pandemic would be devastating.

“The timing right now is not ideal,” said Barr.

Additional payroll costs might break small business owners who are still not recovered from the financial losses of the pandemic, he said.

Also during the webinar, the panelists discussed the importance of cultivating a diverse workforce. Diversity does not just mean racial diversity, they said, but age, gender and cultural diversity as well.

Studies show that companies with a diverse workforce and leadership have better productivity and financial outcomes, said Chappell-Williams. Part of the reason for that, she said, is because diversity brings different ways of looking at things.

“It shifts you out of the mindset that ‘This is how we’ve always done things…,’” she said. “That’s how you drive innovation.”

Chappell-Williams added later that being open to diversity can help remedy supply chain shortages for business during the pandemic as well.

“Look beyond your traditional supply chains,” she said, advising companies look at women-owned and minority-owned businesses as options. “See who else is out there that can help.”

PA Chamber president calls U.S. Capitol breach “an assault on our democracy”

Gene Barr – Submitted

Following Wednesday’s storming of the U.S. Capitol by supporters of President Trump, the PA Chamber of Business and Industry’s president and CEO called for reconciliation and healing to move the country forward.

Gene Barr called the violence at the federal complex “unacceptable” and “an assault on our democracy and an affront to our ideals,” and hoped to see politics return to normalcy.

“Those who committed these acts should be prosecuted as soon as possible,” Barr said in a statement issued this afternoon. “One of the hallmarks of our democracy has been the commitment by those in elected office to a peaceful transition of power. Hopefully this will galvanize all of us to focus on the need for civility in politics as well as everyday life, and also on rebuilding the spirit of cooperation needed to move this country forward.”

Barr, along with a number of other area chamber presidents, spoke to the Central Penn Business Journal late last year about what Joe Biden’s win could mean for the midstate business community. In it, the chamber leaders agreed that a President Biden could bring about an era of stability in politics that could be a boon for day-to-day businesses.

State chamber leaders weigh pros and cons of a Biden presidency

Photo by Adam Schultz / Biden for President

President-elect Joe Biden is on his way to the White House after winning both the popular vote and an estimated 306 electoral votes in the 2020 presidential election, but which Biden is the country going to get?

Will it be a President Biden who embraces policies espoused by the farther left-leaning voices in his party, or the moderate Biden, whom voters remember from his days in the Senate? Midstate business leaders say that will depend on which party wins control of the Senate.

The Senate majority will be decided by two run-off elections on Jan. 5, in two, too-close-to-call seats in Georgia. If Democrats win both contests, the Senate will be split evenly between both parties, giving the tie-breaking vote to Vice President-elect Kamala Harris.

“People’s perspective of a Biden presidency is shaped by whether or not the Republicans continue to control the Senate,” said Thomas Baldrige, president and CEO of the Lancaster Chamber of Commerce. “If they do continue to control the Senate, there is an expectation that his presidency will be more to the center, and if the Democrats control the senate his presidency will be pulled left.”

For many midstate businesses, however, the matter of who is president matters less than the more pressing matter of knowing when the country can expect a fourth wave of COVID-19 stimulus. The number of coronavirus cases in the state is rising exponentially and many businesses continue to operate in the red.

On Nov. 18, the state Department of Health reported 6,339 positive cases, the highest one-day count since the beginning of the pandemic.

“We’ve talked to people about this and I will tell you that the overwhelming response has been, ‘how do we deal with COVID and keep our people safe?’” said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry. “That was much more so than ‘who will be president?’”

Biden’s plan to combat COVID-19, states that as president he will be “taking immediate, bold measures to help Americans who are hurting economically right now.” Those measures, according to the Biden campaign, will include direct federal support and a renewable fund to state and local governments that could be used to provide mortgage and rental relief for impacted workers, interest-free loans for small businesses and help employers keep workers on the job.

The Biden administration will also be looking to establish a temporary small- and medium-sized business loan facility that will offer interest-free loans to businesses during the pandemic.


Assuming the country is able to find a way around the pandemic in the coming months, a Democrat in the White House could mean the end of regulatory rollbacks, which were a hallmark of President Trump’s tenure, and one that proved positive for many chamber members, said David Black, president and CEO of the Harrisburg Regional Chamber and CREDC.

“A lot of businesses I’ve talked to were generally happy with the policy initiatives under the Trump administration,” Black said. “They were not necessarily happy with how (the administration) conducted business but they were happy with the policies.”

Early in his presidency, President Trump signed an executive order requiring federal agencies to cut two regulations for every one they create. Biden could potentially revoke the order in his first days in office. The president-elect has already pledged to walk back a number of Trump era orders.

Black is finding that many business owners are optimistic about a President Biden thanks to his long standing relationships with Republicans.

While many businesses prospered under the Trump administration, they are also looking to escape an administration whose uncertain nature proved hard to build long-range plans around.

“I’ve heard from people, frankly, even from those that support Trump, that are looking forward to more stability and less drama,” said Baldrige. “Which may make planning and day-to-day business easier. That might be the gain in a Biden presidency.”

The minimum wage

Despite the potential positives of a Biden presidency, chamber leaders across the region have heard a number of concerns regarding Biden’s platform, or the goals of his fellow Democrat, such as raising the minimum wage.

Biden has mentioned on a number of occasions that as president he would fight to increase the federal minimum wage from $7.25 to $15 an hour, something that could spell doom for small businesses.

Biden’s platform specifies that he will work to not only raise the federal minimum wage to $15, but also include workers who aren’t currently earning the minimum wage. The platform also notes that he has previously supported eliminating the tipped minimum wage.

For restaurants already struggling to survive the pandemic, a raise in the minimum wage is the last thing they need, Barr said.

“Federal minimum wage is just unfair,” he said. “The cost of doing business in New York City, versus Harrisburg or Greene County, Pennsylvania, is totally different.”

An increase in taxation for Pennsylvania businesses could also act as a one-two punch alongside the pandemic, according to Baldrige, who said it’s the wrong time to raise taxes and the wrong time to saddle midstate businesses with more regulations.

“I would suggest that the priority of the list they are working from needs to be more immediate and that would necessitate another round of stimulus funds, which will be necessary to get companies through the winter,” he said.

Business leaders praise law that makes it easier for former inmates to obtain professional licenses

Recently enacted legislation that reforms the process used by Pennsylvanians with a criminal record to obtain an occupational license will help the state address persistent workforce skills gaps, industry leaders say.

Under the new law, the commonwealth’s 29 occupational licensing boards could only deny a license if the applicant’s criminal history is directly related to the licensed occupation. Boards are required to create a public list of criminal offenses that could prevent licensure from being granted to applicants.

The newly enacted law allows individuals to receive a preliminary decision if their criminal record is likely to disqualify them, so they do not waste time and money on training. However, they can apply and present evidence to support their licensure.

The bill was sponsored in the General Assembly by state Sen. John DiSanto, R-New Bloomfield, and state Rep. Sheryl Delozier, R-Camp Hill, and received bipartisan support from advocates of businesses and criminal justice reform in the state legislature. The bill was signed into law by Gov. Tom Wolf at the beginning of the month.

“Pennsylvania must be a place where hardworking people can put their skills to work,” Wolf said upon signing the bill. “Arbitrarily denying someone a job license because of outdated rules against criminal records is wrong. This new bipartisan law is a commonsense way to allow people to pursue the American dream and build a better life in Pennsylvania. It’s good for skilled workers, their employers and the economy for all of us.”

Pennsylvania oversees the administration of more than 250 professional licenses — 250 opportunities for individuals to find meaningful employment in specialized trades and help close the exiting job skills gap, which is consistently ranked among the top concerns for businesses in surveys, according to the Pennsylvania Chamber of Business and Industry.

Chamber President and CEO Gene Barr said helping qualified people earn occupational licenses is one part of a strategy by the Pennsylvania chamber to address Pennsylvania’s “workforce crisis,” along with sponsoring workforce training programs for businesses.

“Providing this uniformity and clarity in the application of the occupational licensure law will help people make informed decisions related to the education and training opportunities they pursue,” chamber President and CEO Gene Barr said in a statement. “It will further help to ensure that good candidates are not being denied entry into their chosen career path based on a bad decision for which they’ve already paid their debt to society.”

Business leaders stress need for COVID liability protection

Gov. Tom Wolf will need to expand liability protections to manufacturers, small businesses and more health care providers or risk Pennsylvania businesses refusing to open for fear of frivolous COVID-19 related lawsuits, said a coalition of state associations.

In early May, Wolf signed an executive order that provided legal protections to health care providers against medical malpractice suits related to treatment of COVID-19.

A group of leaders from numerous state associations, including the Pennsylvania Medical SocietyPennsylvania Chamber of Business and Industry and the PA Manufacturers Association, asked the governor to offer similar protection to more industries during a media call last week.

Expanding liability protection to more businesses would protect companies like manufacturers, many of which transformed their productions to help supply goods such as personal protective equipment to hospitals, said David Taylor, president of the PA Manufacturers Association.

By failing to give protections to manufacturers, the state would be ignoring the risk businesses took to support their communities, he said.

“Manufacturers accepted that challenge and brought on that risk,” he said. “It is disappointing that the governor would fail to recognize the contributions made by manufacturers.”

Liability protection could also let small businesses feel comfortable reopening their storefronts without fear that they could be sued if someone contracts the virus while in their store.

“There is a critical question there: do I re-risk everything I’ve built, or do I make the decision to remain closed or stay closed,” said Gordon Denlinger, Pennsylvania state director of the National Federation of Independent Businesses. “Our concern is that we don’t get the reopening we need because of the threat of these lawsuits.”

Proponents of increasing the protections for health care providers say that Wolf’s orders don’t protect as many providers as similar laws in New York and New Jersey, both of which were enacted in April.

While the governor’s executive order protects health care workers providing care to COVID-19 patients in hospitals and nursing homes, it does not protect physicians providing care in their offices from malpractice lawsuits, according to Dr. Lawrence John, president of the Pennsylvania Medical Society.

“As our state reopens, physicians in all of these settings will play a role in ensuring that Pennsylvanians have access to care if they come down with symptoms,” John said. “Since attorneys can’t sue health care workers providing care in hospitals, physicians will be an easy target for these claims.”

The order also excludes long-term care facilities, where 3,557 of the state’s 5,567 total deaths occurred, according to a report by the Pennsylvania Department of Health on June 1.

Gene Barr, president of the Pennsylvania Chamber of Business and Industry, said that the coalition is not condoning blanketed immunity for all health care providers and businesses, but rather targeted temporary immunity with strict guidelines.

“If they disregard the guidelines, they lose the protection,” he said. “We have businesses fighting for survival and we need to get them back as soon as we can. The fear of lawsuits will hinder that.”

Penalties are in place for businesses, counties defying Wolf reopen plan

Pennsylvania business owners could lose their state licensing credentials and eligibility for liability insurance if they do not comply with the governor’s mandated three-phase reopening process, according to a statement from Gov. Tom Wolf Monday.

A 13-county cluster in the state’s southwest region this Friday is set to join the 24 that moved from the red to the yellow phase last week, allowing their business communities to resume limited in-person operations. State health officials say a county is considered for this transition when it experiences less than 50 new confirmed cases per 100,000 people in a day, a threshold many counties around the commonwealth have met.

However, State Department of Health Secretary Rachel Levine told the State Senate last week that this requirement was “necessary but not sufficient,” and that there are other factors the health department will consider — availability of testing and transmission data, among them.

The governor’s phase-in plan to reopen the Pennsylvania economy is losing legitimacy among small businesses who say waiting for state authorities to grant them the green light could cost them their company.

“People are questioning the validity of the order,” said John Longstreet, president and CEO of the Pennsylvania Restaurant and Lodging Association (PRLA), in an interview Monday.

“There are some people who are going to lose their businesses,” he said, noting that many small business owners are having to dip into their mortgage to sustain their business through the ongoing recession. “When you get into situations like that, people are going to do what they can to survive.”

County officials in Lebanon, Dauphin, York, Cumberland and Perry counties issued statements saying they would not prosecute businesses for failing to comply with the Wolf administration’s three-phase, county-by-county reopening process.

“Enough is enough,” wrote Dauphin County Board Chairman Jeff Haste. “It is time to reopen the commonwealth of Pennsylvania and return our state to the people and not run it as a dictatorship.”

Lancaster County public officials penned a letter to Gov. Wolf that said they would move the county from “red” to “yellow” designation on May 15, which would allow companies to resume limited in-person operations, with or without the governor’s cooperation. The letter charged Wolf administration officials with failing to be transparent about why Lancaster County isn’t allowed to resume operations despite meeting state guidelines.

“We have consistently called for a data-driven, collaborative and transparent approach to getting through this crisis,” according to the letter, signed by County Commissioners Josh G. Parsons and Ray D’Agostino, Sheriff Chris Leppler and state lawmakers representing Lancaster. “In refusing to do so, you have lost the will of many people to continue on the extremely narrow path you have outlined.”

In his Monday briefing to the press, Wolf condemned efforts by public officials to speed up the process of reopening commerce, calling them “cowardly acts” that endanger the lives of Pennsylvanians by encouraging companies to resume in-person business functions before contact tracing and widespread testing are available.

“I cannot allow residents in a red county to get sick because their local officials can’t see the invisible risk of the virus in their community,” Wolf said Monday. “So, I must and I will impose consequences if a county locally lifts restrictions when it has not yet been given the go-ahead by the state.”

Wolf said non-compliant counties would not be eligible for federal stimulus discretionary funds, businesses would no longer be eligible for business liability insurance and restaurants that resume operations could lose their liquor license if they resume operations ahead of the Wolf administration’s authorization.

Longstreet said many businesses could lose business permits and liquor licenses if the state law enforcement authority trumps county law enforcement officials in disputes over violations to the state’s phase-in approach.

“I respect their [county officials’] authority, but their authority is at a different level than the state,” he said. “It’s about what the state wants to enforce for those who hold state permits.”

Business advocacy groups say they don’t urge any employer to violate the governor’s order, but they are preparing member businesses for some of the safety issues that confront a business attempting to reopen. David Black, president and CEO of the Harrisburg Regional Chamber, said he’s telling businesses to “use caution, be safe and check with your insurance carrier.”

PA Chamber President and CEO Gene Barr said his message to business owners is: “Whenever you open, wherever you open, you need to do it safely.

“We’d never encourage anyone to break the law,” he said. “There are some things businesses can be doing, to go along with the governor’s comment, to use common sense.”

Health care, politics, and COVID-19

Long before the coronavirus paralyzed the country, healthcare was a top concern among most Pennsylvanians. And healthcare will remain a top issue through the crisis and well after the November national elections, according to experts who have been monitoring long-term trends.

Exactly how public opinions might shift will depend on the ways the state, national and local governments handle the current crisis.

“Healthcare traditionally has been reported as the most important issue for Americans,” said G. Terry Madonna, director of the Center for Politics and Public Affairs, professor of public affairs, and director of the Franklin and Marshall College Poll. “What we don’t know is, if at the end of the day, do the values shift, do the opinions shift toward more government control? We have to see how it plays out,” he said.

Going into April, Bernie Sanders remained in the race, running on a platform of “Medicare for all,” a stance that was consistently attacked by more moderate candidates, such as South Bend, Indiana Mayor Pete Buttigieg and Sen. Amy Klobuchar of Minnesota before they dropped out of the Democratic primaries. They argued that national health care would be too expensive, especially considering that most Americans want to keep their private insurance. Joe Biden continued his support of the Affordable Care Act, which was the signature legislation of President Barack Obama. Biden, who strongly lobbied for the ACA as Obama’s vice president, has argued for improvements to the system, while encouraging an expansion of Medicare and improvements for private insurance.

As for Trump, he succeeded in getting rid of the ACA’s individual mandate, which required people to get insurance or pay a penalty. Until it was shed, the mandate led many people to pay the penalty because it was less expensive than insurance, which continued to go up under the ACA. Trump also has been fighting the ACA in federal courts, while maintaining that any replacement plan must include covering pre-existing conditions.

Madonna and others said the stances of Sanders, Biden and Trump might hold through the election but the coronavirus has been such a disruption that public opinion could shift, forcing all elected officials to re-think their positions. For example, if the federal government handles the crisis expertly, more citizens might gain confidence that it could handle a national health plan. However, the opposite could happen just as easily, Madonna said.

Gene Barr, president and CEO of the PA Chamber of Business and Industry, noted that Trump often has made public comments that support traditionally Democratic positions, such as controlling the prices of prescription drugs. However, if the pharmaceutical companies step up during the crisis and find a cure for the virus quickly, that could back the argument of why the drug companies need their profits to test new drugs and bring them to market, Barr said.

“It is far too early to know how Covid-19 will change people’s perspectives,” Barr said in late March.

In addition to limited constraints on drug companies, the state chamber has supported healthcare plans that would expand Association Health Plans, which give businesses opportunities to pool resources to barter for better prices from health insurance companies. It also backs stronger liability protections for healthcare providers.

“We think the private sector works well, and we need to keep it,” Barr said.

He agrees with Trump and the Democrats that any path forward must include protections for pre-existing conditions. However, assurances must be put in place so that people don’t drop insurance only to add it when they get sick, then drop it again when they get better. An assumption behind the ACA was that it would lower insurance costs because it would increase the pool of healthy young adults who would buy insurance, he and others pointed out. 

“We need to find a system that works but that calls for individual responsibility,” Barr said.

Christopher P. Borick, professor of political science and director of the Muhlenberg College Institute of Public Opinion, noted that Pennsylvania residents increasingly support more government involvement in healthcare. The college conducted its annual healthcare poll in early March. That timing was coincidental to the coronavirus crisis but before widespread social distancing.

The survey showed that Pennsylvanians increasingly think the federal government is responsible for ensuring Americans have healthcare coverage — nearly 6 in 10 Pennsylvanians or 59 percent of those polled.

 “This is an increase of 5% since 2019, when 54% of Pennsylvanians maintained this view,” the report said.

Studying trends

Borick agreed that the virus will have long-lasting societal and political ramifications but that more people have been leaning toward increased government involvement for years. 

“We already had been seeing movement in terms of government involvement,” he said in late March, as the results of the poll were being prepared for public release. For example, plans that would allow people to buy into Medicare would be popular.

The details of such Medicare buy-in plans will make the difference as to whether they gain traction, said Robert Glus, a partner and consulting actuary for Conrad Siegel, a benefits management company based in Harrisburg. Glus gave a presentation early in the year to the Central Penn Business Group on Health, a Lancaster-based group that helps businesses wade through healthcare issues to improve quality and costs. The presentation included overviews of how the national candidates’ platforms compare. While the idea of expanding Medicare is popular, people often become concerned when they see the potential costs.

Ideas require careful analysis because, if proposals don’t offer a level playing field with private insurance, such plans might be just a way to eventually steer care into a nationalized system years later. However, if plans offer fair competition and allow more people to become insured by buying into the Medicare system, that might be something that could gain wider support.

“How you would implement it is going to be important,” Glus said.

He pointed out that he didn’t provide the group with an overview of Republican proposals because detailed plans don’t exist. Trump has talked about controlling drug costs and ensuring pre-existing conditions are covered, but the Republicans don’t have any “overarching plans,” Glus said.

“I call it nibbling around the edges,” he added.

Borick said Trump can act like a populist — as seen by his statements about controlling the costs of prescription drugs — which could make him amenable to plans that expand government involvement. That especially could be true if the federal government handles the crisis well and if the states demonstrate that they stepped up. Trump also hasn’t shied away from spending big when he wants to, Borick said.

“If re-elected, would he go for some sort of big-ticket expansion of government investment?” Borick asked rhetorically. “If they handle it well, and it is seen as a success, it might give everyone some confidence that government could expand its role.”

But Borick and others cautioned that a lot of “ifs” remained as the reaction to the virus plays out.

Politicians, journalists and policy experts react to a crisis differently than most average citizens, said Daniel J. Hopkins, a professor in the department of political science at the University of Pennsylvania. In the height of a crisis, many people seek solutions and ideas that might be a shift from traditional ways of thinking. However, Hopkins said, studies suggest that severe shifts among average people are not long-lasting. He cautioned that, depending on when the virus crisis ends, a lot of people likely will revert to their previous corners of the debate, which would include a reluctance to give up their private insurance for a national plan.

After a crisis, “the public is less likely to draw broader ideological conclusions,” he said. “When faced with some new event, oftentimes the public goes to its greatest hits album.”

Diane Hess, executive director of the Central Penn Business Group on Health, said her group is teaming up with other agencies to track how the virus is handled. Hess, who attended the presentation given by Glus, agreed that the Republicans and Trump don’t provide detailed alternatives to the ACA. They need to come up with a plan that can be compared to it.

“And then we can decide what we like and don’t like,” Hess added. 

Until then, Democrats will continue to push to improve the ACA. However, many citizens are skeptical about expanding it or Medicare because early promises — such as lower costs or that patients would be able to keep their doctors — were not kept, she said.

“I think there is some distrust in the eyes of the people,” Hess said, adding that the government response to coronavirus might help steer future conversations about healthcare improvements. “We are just too early in the process to know exactly what is going on.”

The overall issue isn’t going away, Hess pointed out.

“Healthcare will continue to be the No. 1 issue,” she said. “… We really need to go back to our roots. How can we improve access and cost?”

Gov. Wolf’s budget: industry leaders applaud workforce investments, blast gas tax

Gov. Tom Wolf unveils his $36 billion spending plan to mixed reception from the business community.

Gov. Tom Wolf’s executive budget for 2020-2021 fiscal year calls for increases to the state’s workforce development effort and corporate tax cuts designed to make the state’s business climate more competitive.

But the $36 billion spending plan, a 6% spending increase from the previous year, would also advance reform measures that would impact businesses with proposed increases to the minimum wage, closing the “Delaware-loophole” and a severance tax on natural gas pipelines.

The public-private compromises reflected by the proposed spending plan left industry leaders hot and cold about the budget and the overall economic climate it speaks to in the coming fiscal years. Business advocates in the General Assembly say they will use the next several weeks to negotiate a better deal for business interests before the July 1 start of the next fiscal year.

“I wish the governor fought as hard for meaningful school property tax elimination like he has for a tax on our natural gas,” state Sen. Kristin Phillips-Hill, R-York, said in a statement that encapsulated the split in vision reflected in the budget. “I will continue to fight for the people who pay our bills to ensure we are not jeopardizing our long-term financial stability by overspending with no accountability.”

Investment in workforce

Lack of qualified workers remains the top concern of the businesses in Pennsylvania. An annual economic survey of employers by the Pennsylvania Chamber Foundation in 2019 found that 22% listed it as their top concern, an increase from 14% in 2018.

“It’s frustrating to imagine that someone might lose out on their opportunity to get ahead because of something as ordinary as bureaucratic red tape or a simple lack of bus routes,” Wolf said in his budget address to the General Assembly this week. “Frustrating – and also stupid if we care about our economy.”

The Wolf administration’s executive budget reflects that the governor listened to stakeholders in the private sector on this front, with $14.8 million reserved for investments in trade schools, STEM programs and worker training.  Programs like WEDnetPA and the Manufacturing PA join industry and post-secondary institutions to streamline students from college into the workforce.

According to Wolf, WEDnetPA helped some 20,000 companies train more than a million workers during the last two decades. It would receive $10 million under Wolf’s budget.

Wolf also proposed $29 million for the Manufacturing PA fund, a $17 million increase from the previous fiscal year.

“We’re pleased to continue our work with the governor’s Keystone Economic Development and Workforce Command Center and legislative leadership to raise awareness of the concerns and needs of the business community in the state’s evolving jobs market and identify innovative solutions to addressing the jobs skills gap and removing barriers to work,” said Gene Barr, president of the Pennsylvania Chamber of Commerce and Industry.

Corporate taxes

Wolf’s spending plan calls for a reduction of the corporate net income tax rate and the implementation of a combined reporting requirement to improve the business climate and make it more competitive with surrounding states.  Under Wolf’s proposal, the corporate net income tax rate would decrease in the next five years: 8.99% on Jan. 1, 2021 and 5.99% on Jan. 1, 2025.

“We encourage lawmakers to move forward with substantial state tax reform – starting with a reduction to the CNI [corporate net income] rate – that is based on the principles of competitiveness, fairness, predictability and simplicity,” Barr said.

Natural gas pipeline tax

Advocates for natural gas companies were not pleased with the governor’s severance tax on unconventional natural gas extraction. Revenue from this proposed tax on natural gas would amount to a $4.5 billion fund for the Restore Pennsylvania initiative’s diverse pipeline of infrastructure projects, which state officials would aid business expansion with stable infrastructure.

This marks the second year of Wolf’s “Restore Pennsylvania” initiative to help communities across the state with broadband, disaster recovery and preparedness and road construction and business sites. The funding is slated to come from a tax on natural gas wells.

Dan Weaver, president and executive director of the Pennsylvania Independent Oil and Gas Association, called Wolf’s proposed natural gas tax a penalty for one of the state’s most lucrative assets in the Marcellus Shale gas field.  The destructive impact of a severance tax on natural gas drillers would be exacerbated by low commodity prices, punishing an industry that has played a significant part in the state’s economic rebound in the last decade through the Impact Tax, he said.

“Restoring Pennsylvania is what natural gas developers have been doing here for the past decade,” Weaver said, re-appropriating the name of the governor’s program that would be financed through by revenue from the tax. “The Impact Tax, which no other segment of Pennsylvania’s economy pays and no other gas-producing state has, is restoring public assets and funding development projects in communities in all 67 of the state’s counties.”

Refinanced bonds will save Pa. employers $552M in 2020

Pennsylvania businesses will save an estimated $552 million in 2020 now that the state has finished refinancing 2013 federal loans that paid for the post-recession unemployment compensation fund.

Effective Jan. 1, 2020, the state Department of Labor and Industry slashed the 1.1% tax rate interest factor, reducing the unemployment tax rate to its lowest level since 1979. The interest rate of 1.1% was set in 2013 by Act 60 of 2012, to refinance bonds that funded state unemployment benefits at the lowest possible rate of interest, saving employers an estimate $57 million in interest costs during the last seven years.

Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry, said the 2008 recession put the state’s unemployment compensation fund in “financial crisis,” which forced the state to borrow money from the federal government in the form of bonds. Pennsylvania’s businesses will be relieved now that one of the country’s highest unemployment tax rates has been removed from their expense line, he said.

“We were proud to work with a bipartisan coalition of legislators and the [former Gov. Tom] Corbett administration to shore up this critical safety net and refinance the federal loan, which employers were still responsible for paying off, but under more favorable terms,” Barr said. “We are pleased employers can start off the New Year with a lower unemployment compensation tax rate and thank Gov. Wolf for recognizing the need to drive down business costs in PA.”