State lawmakers expect Beaver County’s cracker plant to help rebuild western Pennsylvania’s once-robust manufacturing industry, but say policy changes are equally critical to that vision.
Pennsylvania must lower its corporate income tax rate, invest in transportation infrastructure and simplify its permitting process to truly compete for manufacturing jobs, a panel of legislators and business leaders said Wednesday at a virtual roundtable hosted by the Pittsburgh Airport Area Chamber of Commerce.
The state’s manufacturing base is faring poorly compared to neighboring states, noted moderator and retired KDKA news anchor Stacy Smith, with labor statistics indicating Ohio gained 9,400 manufacturing jobs from 2015-20 and Pennsylvania lost roughly 300 in that period.
Trade publication Site Selection Magazine placed Pennsylvania 22nd alongside Wisconsin in its most recent ranking of business-friendly environments, and the state’s corporate net income tax remains the second-highest in the nation at 9.99%.
“The single most important step we can take is reducing the corporate net income tax,” said state Sen. Ryan Aument, R-Lancaster County. The rate should be immediately lowered to at least 6.99%, he said, with performance-based metrics in place to reduce it even further.
Speakers including state Rep. Rob Matzie, D-16, Ambridge, and state Sen. Jay Costa, D-Allegheny County, expressed support for lowering corporate taxes, but said years of attempts have been unsuccessful.
Matt Smith, president of the Greater Pittsburgh Chamber of Commerce, said reducing the corporate net income tax is one of his organization’s top policy issues.
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“Economic growth will lead to a broader tax base that will, in turn, lead to greater tax revenue and opportunity,” he said. “And will allow for that revenue and investment to come in to address a lot of issues…like workforce and infrastructure. You can’t deal with any of those issues if we’re in a scarcity dynamic – which we are right now. We need to be in a growth dynamic.”
Other barriers to regional job growth, participants said, involve both an often confusing permitting process on state and local levels and aging transportation infrastructure.
“One of the reasons we see some of these other states succeeding is they have prepared sites that are ready to go,” said Don Smith, president of the Regional Industrial Development Corporation. Proper investment in roads, bridges and other necessary infrastructure, he said, assures business owners that equipment and workers can safely make it to and from locations.
Steps to improve the region’s business reputation are already underway, Matzie said, as Shell Chemicals plans to begin operations at its petrochemical complex in Potter Township next year. Shell received $1.7 billion in Pennsylvania tax credits to build the facility.
Matzie said his office has received multiple calls from manufacturing companies looking for space in his district.
“I’m getting calls all the time…most of those (business park) locations are either under contract or waiting for the Shell plant to become operational,” he said. “So I think we’re in pretty good shape relative to taking advantage of that, but we can’t stop there.”
Matzie said economic growth takes time, using I-376 as an example.
“Changing Route 60 to I-376 was a 25-year process,” he said. “If that’s not I-376, Shell probably doesn’t even come. Site selectors are looking for interstate, how close they are to the airport, they want a true multi-mode site.”
Finally, speakers said further diversifying the state’s energy portfolio should remain a priority, including fossil fuels, nuclear power and renewables.
“I think it’s essential we preserve that going forward,” Aument said.
More:Critics, defenders debate cracker plant impact as project nears completion
Chrissy Suttles covers business, energy and environment for the Beaver County Times and the USAToday Network. Contact her at [email protected] and follow her on Twitter @ChrissySuttles.
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