Jezree Friend is the Manufacturer & Business Association’s senior government relations representative and is responsible for developing legislative priorities and strategies; encouraging membership grassroots activities; and lobbying on behalf of a pro-growth, pro-business agenda. Contact him at jfriend@mbausa.org.
What if I told you there is a plan in the Pennsylvania General Assembly that would create jobs and redevelop infrastructure without any new fees or taxes?
Let that sink in: pro-growth legislation without raising taxes. That’s revolutionary stuff!
The legislative package, dubbed “Energize PA,” will create jobs, re-use abandoned manufacturing sites and streamline permitting processes. These ideas have bipartisan support from lawmakers and stakeholders.
The plan highlights Pennsylvania’s roots in energy and manufacturing, all the while building our booming economy to provide family- sustaining jobs.
Pennsylvania has long realized significant benefits from oil and gas production in the Keystone State. The industry alone contributes $45 billion to Pennsylvania’s economy, provides more than 300,000 family sustaining jobs, generates billions of dollars in bonus and royalty payments for Pennsylvania landowners, and significantly reduces air emissions. Additionally, it has transformed Pennsylvania into the No. 2 natural gas-producing state in the country and a major component in America’s pursuit of global energy dominance.
Statewide, the industry pays an impact tax, which goes directly back to the counties for community projects and infrastructure upgrades. The impact fee has provided $1.7 billion in local revenue since 2012. The Independent Fiscal Office estimates the impact tax revenue collected from 2018 alone will total $247 million for distribution across the state, the largest-ever annual revenue generated. Each year since his election, the governor has called for additional taxes on the industry for different reasons with each request. The governor’s proposed increase would turn our state from one of the most competitive to among the highest taxed in the industry.
As part of the Energize PA initiative, the focus is to capitalize on our strengths rather than weaken them. The attractive provisions include:
• Attracting large manufacturers to Pennsylvania by providing a tax credit to those industries using methane in production.
• Encouraging businesses to invest in growth and technology by increasing the Net Operating Loss deduction cap that a business may carry forward. The current percentage is 40 percent. This bill increases that number to 45 percent in taxable year 2020 and 50 percent in taxable year 2021.
• Generating and retaining family sustaining jobs and encourage capital investment in Pennsylvania’s natural gas and manufacturing industries by creating 20 Keystone Energy Enhancement Zones whereby business will be eligible for state and local tax exemptions, as well as tax credits for 10 years.
• Demonstrating that Pennsylvania is open for business and wants new industry by creating a registry within the Department of Community and Economic Development of abandoned manufacturing sites that will list all available properties for development.
• Further incentivizing businesses to remediate properties that pose health and safety risks to our residents through the brownfields and redevelopment program by creating a streamlined process.
• Reforming the environmental permitting process and plans so industries can get to work without bureaucratic delays.
Pennsylvania needs a regulatory and permitting structure conducive, not punitive, toward capital investment.
• Creating an independent commission to deal solely with the Department of Environmental Protection (DEP) permit process. This will free up the DEP to focus on enforcing environmental laws.
The gas industry and manufacturing go hand-in-hand and their success is right in front of us with our best days ahead. Evidence? Check out the cracker plant going up in Beaver County. There are presently 3,700 workers with that number set to grow to 7,000.
We have heard repeatedly over the last year thanks to the “Forge the Future” study that the right public policies with cooperation from the private sector can generate a $60 billion increase in Pennsylvania gross domestic product, support an additional 100,000 new jobs and increase state revenues by $2 billion to $3 billion.
As important as it is to work on our weaknesses, our strengths carry us. Let’s build our strengths and “energize” our manufacturing sector without raising taxes.
