Mid-Year Budget Report Strikes Optimistic Tone; Budget Secretary Albright Announces Resignation

From PA Chamber of Business & Industry 

Despite recent projections from the state’s Independent Fiscal Office that the Commonwealth faces an up to $1.7 billion deficit headed into 2019-20 budget discussions, the tone from the state’s outgoing Budget Secretary is one of optimism for Pennsylvania’s fiscal health.

At a mid-year budget report press event last week, Sec. Randy Albright pointed to months of higher than projected revenue collections, rising gaming revenue and no sharp spikes in required pension payments as a sign that Pennsylvania will “end the year with not just a balanced budget but a surplus,” adding that “we don’t think we face a $1.5 billion deficit for the proposed budget year.”  He did admit, however, that the state might need supplemental appropriations to pay for health care entitlement spending that is the result of transitioning to its new managed care system, PA Health Choices.  Albright also expressed that increasing human services costs, re-negotiating state labor contracts, decreasing reserves from the Pennsylvania High Education Assistance Agency and increasing State Police funding are all issues that could pose problems for an on-time budget deal.

According to a story in the PLS Reporter, Republican House Appropriations staffer John O’Brien, who works for House Appropriations Chairman Stan Saylor, R-York, agreed that the IFO’s estimate is extreme (though IFO Executive Director Matthew Knittel continues to stand by his numbers).   O’Brien told the media outlet that the IFO’s projections are based on a 10 percent spending increase – which he said the General Assembly will not allow.  He added that Albright’s positive picture is based on a growing economy with decreasing unemployment, which makes the case for fair and predictable tax policy choices in order to maintain economic momentum.  Republican state legislative leaders have been stressing to reporters in the weeks leading up to swearing-in day that they are taking a hard stance against any new taxes in the new fiscal year.

Notably, Albright also announced during the event that he will be departing his post at the end of the month.  The first member of Gov. Wolf’s Cabinet to announce that they won’t be returning to their post when the new term begins in January, Albright served all four years of Wolf’s first term.  He will be replaced by Jen Swails, who has more than 19 years of fiscal and policy experience in state government.  Her most recent role is that of fiscal management director for the new Shared Services Budget Office, which oversees budgets for the Depts. of Aging, Health, Human Services and Drug and Alcohol Programs. 

Seeking Long-Term Flooding Solutions for Businesses

Among the areas that experienced flash flooding this summer was a portion of South Centre Township, Columbia County, which impacted homes and several major employers. Among them, Chamber members SEKISUI SPI and J.M. Smucker were forced to shut down for days to deal with unprecedented flooding. Efforts are underway to reduce or eliminate the future risk to these businesses and residents.

Representatives from PennDOT, DEP, North Shore Railroad, the SEDA-COG Joint Rail Authority, Columbia County, and South Centre Township, as well as Chamber president Fred Gaffney, representative David Millard, and senator John Gordner recently met with the affected businesses to discuss the issues that may have contributed to the flooding. The Township has already worked with DEP to address a stream bed, which was believed to be a major contributor. Agency representatives pledged to review their areas of responsibility to ensure that drainage systems are working properly. Senator Gordner and representative Millard are working with DEP and the Township to pursue funding for a storm water management study for the area, which has not been done since the early 1970s. Such a study could identify other long-term solutions for dealing with runoff and drainage.

The businesses expressed their appreciation to the various entities helping to ensure that the hundreds of jobs and business investments will be safe from future risk of flooding.

Bloomsburg Ordinance Change Seeks to Increase Parking Availability

Bloomsburg Town Council recently approved an amendment to its zoning ordinance with a goal of increasing the amount of public parking available for people who visit and work in the downtown. The changes, approved by Council at its December 10th meeting, require that any new residential development in the downtown commercial district provide private parking. The ordinance allows parking, including multi-level parking structures, to be developed within the district subject to certain criteria. Commercial uses and existing residential uses are not required to provide parking.

The changes had long been considered to reduce the strain on public parking without discouraging the development of housing.  Decades ago, the Town eliminated the need to provide parking for residential development to encourage a higher density of people living in the downtown. With the success of such development, the demand for permit parking increased and has impacted adjacent residential areas. While future demand should not be increased by new residential development, by providing greater flexibility for creating private parking, some of the current demand could also be reduced.

The Chamber and Downtown Bloomsburg Inc. worked with the Town on this ordinance over many months. These changes are an important step forward in Bloomsburg’s management of parking in the downtown. We look forward to discussing further improvements to parking management in 2019.

PA Chamber Signs Letter Urging Federal Passage of “Prisons to Paychecks Bill”

From PA Chamber of Business & Industry

Last week, the Justice Action Network – a national coalition of chambers of commerce, corrections programs and business associations – sent the legislative leaders of the U.S. House and Senate a letter urging passage of the bipartisan FIRST STEP Act, which will help address a skills gap within the nation’s workforce and provide incarcerated persons a second chance.

The legislation aims to provide job training, treatment and rehabilitation programs to those who are currently cycling in and out of America’s jails and prisons.  It provides tools for business and trade associations to implement their own job training programs behind prison walls to help incarcerated people learn skills that are tailored to jobs employers have difficultly filling and can help them transition successfully from “prisons to paychecks.”

In making the case for the bill’s passage, the coalition letter lists some of the industries that could benefit from the FIRST STEPS Act, including trucking, construction and manufacturing.  One example provided was the National Association of Home Builders, which is experiencing labor shortages in all specialties and trades and has 300,000 unfilled construction jobs nationwide.   Likewise, the manufacturing sector will need to fill 3.5 million jobs over the next decade – 2 million of which are expected to go unfilled due to a lack of skilled candidates.

“That is why chambers of commerce and business leaders in states like Michigan, Pennsylvania, Oklahoma, and Kentucky have strongly supported state criminal justice reform efforts that break down barriers to employment for the formerly incarcerated, and why the U.S. Chamber of Commerce has gone one step further by endorsing the FIRST STEP Act, which will help ensure that incarcerated people are job-ready before they take their first steps of freedom,” the coalition wrote.

The PA Chamber supports this legislation as a good step toward addressing Pennsylvania’s workforce development challenges.  Last session, we supported “Clean Slate” legislation. This bill, signed into law by Gov. Tom Wolf, is a first of its kind program to provide a mechanism for individuals with low-level, non-violent criminal offenses to have those records sealed from public view and give them a better chance at securing housing and a good job.

Report Offers Options for Keeping Nuclear Power Viable

A recently-released report from the state legislature’s Nuclear Energy Caucus details possible policy solutions that could reduce the risk of premature closure of nuclear power plants in the state. A coalition that works to educate Pennsylvanians about the economic and environmental benefits of nuclear energy and the industry’s positive impact on local communities applauded the report. The Columbia Montour Chamber is a member of the Nuclear Powers Pennsylvania coalition.

NPP thanked Caucus leadership, including Co-Chairs, Senators Ryan Aument and John Yudichak, and Representatives Becky Corbin and Rob Matzie. In total, nearly 80 lawmakers, Republicans and Democrats alike, from both the House and Senate, are members of the Nuclear Energy Caucus.

“This bipartisan Nuclear Energy Caucus is the first such caucus anywhere in the United States – and the release of this report is a critical step forward for the 16,000 men and women whose livelihoods rely on Pennsylvania’s nuclear industry,” said Martin Williams, NPP Co-Chair and Business Manager of Boilermakers Local 13 in Philadelphia. “The members of my union and of this coalition would like to see our state government properly recognize the clean-air attributes of nuclear energy and level the playing field with other clean technologies, like wind and solar. By creating this report and now sharing it with their colleagues in the state House and Senate, along with Gov. Wolf, it is our hope it will set us on a path toward identifying solutions that will protect thousands of good-paying jobs and keep the air we breathe clean.”

“Over the course of the five hearings held by the Caucus, members heard from witnesses who detailed the economic and environmental benefits of nuclear energy and the industry’s positive impact on local communities throughout the Keystone State,” said Fred Gaffney, Chamber President. “We know that nuclear power is an important part of Pennsylvania’s energy mix. We encourage all lawmakers to read the Caucus report and to recognize the tremendous value of nuclear energy across the state.”

Pennsylvania today ranks second in the nation for nuclear power generating capacity. Nuclear energy is the single greatest contributor to Pennsylvania’s energy generation portfolio, representing 42% of the mix, while accounting for more than 90% of the Commonwealth’s clean power. However, that production is threatened with news that at least two of Pennsylvania’s five nuclear plants are preparing for premature closure without a legislative remedy. Three Mile Island in Dauphin County and Beaver Valley in Beaver County are slated for closure in 2019 and 2021, respectively. According to an April 2018 report from The Brattle Group, should those two plants close, along with two nuclear plants slated for closure in Ohio, it would reverse environmental benefits equal to 25 years of wind and solar development.

The report is available online