HARRISBURG – State Senator John Yudichak (I-14) questioned Pennsylvania economic development officials Tuesday on how budget cuts proposed by Governor Wolf might impact job growth, tourism and business programming in 2022-2023.
During a Senate Appropriations Committee hearing with the PA Department of Community & Economic Development (DCED), Yudichak – Chair of the Senate Community, Economic & Recreational Development Committee – urged the agency to intensify job creation efforts, as residents and businesses rebound from the latest COVID variants.
“Understanding the role that DCED and state resources play in economic development, it concerns me that the Governor has proposed a 21 percent decrease for DCED’s line item,” said Yudichak.
He pointed out that DCED and the Governor’s Action Team helped spearhead historic job growth in northeast Pennsylvania (NEPA), producing 2,300 new jobs and $1.2 billion in new private investment. Overall, those accomplishments made NEPA the state’s top job creation region, according to an annual report by the Governor’s Action Team.
“It is an accomplishment that we want to build upon,” said Yudichak, noting that NEPA can be used as a blueprint for other portions of the state to emulate.
Yudichak referenced the success of innovative tax policies that are driving economic development and private investment, such as a Sales & Use Tax Exemption for Computer Data Center equipment, approved as part of the state’s 2021-2022 budget, and Act 66 of 2020, which established the Local Resource Manufacturing Tax Credit.
Nacero Inc. recently announced its intention to build a $6 billion lower carbon gasoline facility in Luzerne County, made possible by Act 66, and two companies have expressed interest in constructing new computer data centers in southeast Pennsylvania and NEPA.
Both policies were the result of a unique coalition formed between labor, business and lawmakers.
“Competitive tax rates help create jobs, and smart tax incentive programs help attract new companies to Pennsylvania,” said Yudichak, noting that the “administration has a history of resisting tax credits or exemptions as an economic tool.”
“As we have seen in NEPA and throughout the Commonwealth, smart tax policies leverage private investment and capital goes where capital is welcome,” added Yudichak.
Yudichak voiced support for a legislative initiative by Senator Ryan Aument that would lower the state’s Corporate Net Income Tax. Governor Wolf has also championed the concept. The current rate of 9.99 percent is the second highest in the nation, behind New Jersey.
“State resources and incentives often play a key role in closing a deal on an economic development project or attracting a new company to Pennsylvania, but our business tax policies are what will sustain economic progress,” said Yudichak. “We created nearly 10,000 new jobs in Pennsylvania last year, but we lost many new business opportunities because of our high corporate income tax.”
Workforce development is an ongoing issue, given the state and national labor shortage. Yudichak asked why workforce development programming is not centralized under DCED.
“It remains fragmented over many state agencies, while driving out more than $2 billion to organizations that many of us believe produce very little in terms of developing a highly-skilled workforce,” said Yudichak, who also questioned why the state’s building and construction trades are prevented from having access to workforce development funding.
Additionally, Yudichak touted the Invent Penn State program, which the CERD Committee examined during a public hearing in November 2021.
As part of the Governor’s $43.7 billion budget proposal, $2.4 million would be allocated toward the initiative, which has helped nearly 5,000 entrepreneurs form 218 new companies and spur 300 new jobs since its inception five years ago.
The program blends academic programming, business start-up training and funding for commercialization. Branch locations in Hazleton and Wilkes-Barre are “bringing world class research and innovative economic tools to Main Street,” said Yudichak.
Among other topics, Yudichak questioned DCED officials about business recovery and assistance, escalating energy costs, and a proposed one-time $500 million program that would help families pay for what the Governor broadly defines as household expenses.