Aug. 20—A top leader in the PA Chamber discussed key points in the state budget that he hopes will have positive impacts on businesses and the workforce.

On Friday via Zoom, Alex Halper, director of the Governmental Affairs for the PA Chamber of Business and Industry, spoke to Greater Susquehanna Valley Chamber of Commerce Governmental Affairs Committee members about the state chamber's priorities. He said the state budget had some positive changes for businesses, including a reduction in the corporate net income tax rate.

"That will take Pennsylvania from one of the least competitive rates in the country to one of the most competitive rates in the country," said Halper. "That will make us by that point as the eighth lowest rate in the country. You talk to local economic folks, you talk to government officials who are always trying to sell their communities to corporation to create jobs, bring in more revenue, they are thrilled that this has happened."

On July 8, Gov. Tom Wolf signed into law the 2022-23 Pennsylvania budget, which totals $45.2 billion in spending, an increase of 2.9 percent from 2021-22.

Lowering the corporate net income tax rate has been a priority for years, said Halper. The new budget lowers this tax from 9.99 percent to 8.99 percent this year, with further 0.5 percent annual reductions until the rate reaches 4.99 percent by 2031.

"At 9.99 percent, it has been one of the highest rates in the country," said Halper. "It's the second highest rate on corporations in the country, second only to New Jersey. When we think about economic development, when we think about attracting employers to relocate in Pennsylvania, and for existing corporations to remain in Pennsylvania, that exceptionally high rate has been a giant red stop sign for investments."

The budget also calls for allowing small businesses to carry forward tax liabilities on like-kind exchanges, as allowed in 49 other states; expanding expense deductions for businesses up to $1.08 million, matching the IRS limit; providing $42 million to pay off outstanding debt in the Unemployment Compensation Trust Fund, avoiding a future tax increase on small businesses; providing an additional $350 million to the Workers' Compensation Security Fund, which pays back debt from prior borrowing; and increasing the overall funding to the Department of Community and Economic Development by 63.3%, including a 100 percent funding increase for workforce development.

"For these smaller businesses, whether it has to do with investing in new property or equipment, these tax changes allow for more competitive environment," said Halper. "It allows our small businesses to save a few bucks and invest that back into their businesses, into their people and into their communities."

Chamber President and CEO Bob Garrett said Halper's report will help the organization.

"Halper provided an upbeat message about the state budget, for sure," Garrett said. "Noting that Pennsylvania's business climate historically has not been very favorable to job creation or attracting and retaining businesses, he gave the chamber members at today's meeting a blueprint that we will follow to make our entire state more prosperous."

Halper also noted the budget calls for increasing education funding by $1.8 billion, including an increase of $6 million to fund career and technical schools; and allocating $90 million in federal relief funds to support recruitment and retention of child care workers, and an additional $25 million in state funds for a child care tax credit for working families.

These moves may help employers find qualified workers to fill open positions, he said.

"Nothing will solve the workforce challenges, but a couple of key pieces will help on that front," said Halper.

Making child care more affordable will allow workers to re-enter the workforce, he said.

Committee Chair Malcolm Derk thanked Halper for his comments.

"I appreciate Alex sharing the updates to help inform our membership on actions taken by the Legislature," said Derk. "I found it very informative and it provides context."