As members of the Pennsylvania General Assembly reconvene in Harrisburg this May, the stage is set for robust negotiations surrounding the state's Fiscal Year 2024-25 budget. The Chamber has been meeting with lawmakers to ensure that several issue areas important to our region's competitiveness are included in the state budget. These state advocacy priorities include a more competitive business tax environment, investments in basic education and economic development, and support for transit. 

To help achieve these goals, the Chamber has recently provided several engagement opportunities for our members and stakeholders to connect and convene on budget priorities with prominent state leaders, including Secretary of the Budget Uri Monson, House Appropriations Chairman Jordan Harris, and Senate Majority Leader Joe Pittman. At our annual A Conversation with the Governor event this month, Governor Josh Shapiro offered a glimpse into his views and path forward on our shared goals. The Chamber's relationships with these important Pennsylvania lawmakers and many more equip us to effectively advocate for the interests of the regional business community. Here is a summary of a few of the Chamber's priority areas:  

Topline Spending Allocation

A crucial aspect of budget negotiations will be reaching an agreement on the topline spending allocation. Governor Shapiro has put forth a $48.3 billion budget plan, calling for a $3 billion transfer from the state's $14 billion budget reserves. Navigating these talks remains a priority that will require bridging fundamental differences among party leaders regarding the appropriate use of the state's reserves. 

Transit Funding

Meanwhile, transit agencies across Pennsylvania are seeking additional funding to support more infrequent ridership levels.  Lawmakers are considering a 1.75% increase in the transfer of Sales and Use Tax receipts to the Public Transportation Trust Fund. This effort, where the Chamber urges your support, aims to address the pressing needs of public transit agencies across the Commonwealth, including SEPTA, ensuring that transit agencies will not have to implement service cuts, fare increases, and layoffs, which could have detrimental effects on our regional economy. Locally, SEPTA presently faces a $240 million budget shortage that can only be closed with additional state or local funding. 

Business Taxes

Pennsylvania is finally on a path to a more competitive business tax structure.  By 2031, Pennsylvania's corporate net income tax (CNIT) will phase down to 4.99%, down from 9.99%, one of the highest tax rates in the country. To further increase the state's economic competitiveness, the Chamber is advocating for increasing the net operating loss (NOL) deduction carryforward limit, which would provide much-needed relief to businesses, particularly startups and entrepreneurs facing initial operating losses. These companies offer the strongest potential for job growth in our region. Senate Bill 346 would eliminate Pennsylvania's 'Startup Penalty' by aligning Pennsylvania's policies with those of the federal government, which allow startups and small businesses to carry forward 80% of their losses.  The Chamber continues to advocate for tax policy that mitigates the risk they face rather than compounding it. 

Economic Development

The Shapiro Administration has emphasized the importance of key investments in various economic development programs, aligning with the Governor's broader strategy to stimulate growth and innovation across key industry sectors. From scaling high-growth sectors and innovation hubs to investing in workforce training and talent retention, the proposed initiatives aim to foster a vibrant ecosystem for business attraction and expansion. The Chamber has emphasized the importance of leveraging Pennsylvania's strengths in innovation and research to drive long-term prosperity and job creation. 

Minimum Wage

Democratic leaders continue to call for a higher minimum wage in the Commonwealth, citing the need to enhance the quality of life of Pennsylvanians and promote economic fairness. Republican leaders believe that a minimum wage increase can get done in this budget cycle. The Chamber has called on lawmakers to adopt an approach to minimum wage policy that supports the needs of workers and their employers. 

Education Reform

In the midst of these issues, Pennsylvania faces a critical need for education reform to ensure equitable funding for basic education, as previously mandated by the courts. Governor Shapiro has proposed a substantial increase in basic education funding based on the majority report from the Basic Education Funding Commission (BEFC). However, the BEFC report was adopted almost exclusively along party lines, illustrating the current partisan divide and the challenges ahead. The Chamber strongly advocates for lawmakers to fulfill their constitutional obligations by prioritizing fair and equitable funding for basic education, thus providing all students with access to a good education. 

Join Us in Our State Advocacy Efforts

As lawmakers approach this crucial phase of budget negotiations, it is imperative for our regional business leaders to engage policymakers to shape reforms that drive growth and competitiveness. The Chamber stands ready to lead the charge, leveraging our relationships with key lawmakers to advocate for inclusive growth policies. The collective voice of our business and civic community in southeastern Pennsylvania is vital in ensuring that the state budget reflects the needs of our regional business community and paves the way for a prosperous future. To learn more and join us in our State Advocacy initiatives, contact Anselm Sauter, Vice President, Regional Advocacy, the Chamber, at asauter@chamberphl.com.