Proposed Minimum Wage Hike Discussed at Budget Hearings

From PA Chamber of Business & Industry

Among the notable budget hearings in Harrisburg last week included the House Appropriations Committee meeting with the Department of Community and Economic Development where Secretary Dennis Davin estimated no jobs would be lost if Pennsylvania raised the minimum wage to $10.10 an hour. According to a Pennsylvania Legislative Services story, Davin said in his experience meeting with companies that pay various levels of compensation, the only effect of a higher minimum wage would be to “raise people out of poverty.” Davin was also asked if any analysis was done on the impact that the proposed retroactive increase to the Personal Income Tax would have on small businesses in the coming year’s budget (Gov. Wolf wants to raise the PIT by 11 percent and make it retroactive to Jan. 1). Davin said Pennsylvania’s PIT is second lowest among those states that have one, and would rise to only the third lowest after the increase. He said he thinks it is competitive and stressed DCED’s job is to look at the whole picture. The minimum wage was a central topic in the Senate Appropriations Committee’s budget hearing with the Department of Labor and Industry. Secretary Kathy Manderino said the Department of Revenue estimates an increase to $10.10 an hour would generate $60 million in sales and income revenue and reduce the number of people in poverty. Sen. Mario Scavello, R-Monroe, doubted these statistics and said the focus should be on creating jobs, which in his region has increased the average wage. Democratic Appropriations Chairman Vince Hughes, D-Philadelphia, said every surrounding state has a higher minimum wage than Pennsylvania and has higher levels of job growth. “I would suggest that we kick start much harder the drive for raising the minimum wage in Pennsylvania,” Hughes said. “Those who are opposed to raising the minimum wage have a philosophy that just wants to keep people in poverty…we’re going to fight and I’m glad this governor has decided to stand up and fight to raise the minimum wage in Pennsylvania.” On Monday, Governor Wolf signed an executive order raising the minimum wage for employees under the governor’s jurisdiction to $10.15 an hour. The order also covers employees of organizations that negotiate state contracts or that lease property to the commonwealth. This provision will take effect when contracts or leases are solicited or bilaterally modified on or after July 1, 2016.

ChamberPack is Headed to Your Mailbox

The March edition of ChamberPack is overflowing with offers from members and information on the Chamber’s schedule of events. The bi-monthly mailing should arrive in your mailbox this week. Look for Chamber information about an opportunity for members to have exclusive savings on Hershey Park admission tickets, the upcoming Business After Hours at Service 1st Federal Credit Union, sponsorship and business registration forms for the 4th Annual Celebrate Berwick festival, and relevant forms for the Chamber Golf Outing in June. This month’s mailing also features the spring season schedule for Bloomsburg University’s Celebrity Artist Series, information about free corporate luncheons hosted by Rodman Natural Health Solutions, and services offered by Erie Insurance and Mutual of Omaha. ChamberPack is a cost-effective way to direct mail your information to hundreds of business decision makers in the area. The next mailing will be sent in May. Download the reservation form or call Eleanor at 570-784-2522 for more information or to reserve your space today!

SEDA-COG Introduces Small Business Stimulus Plan

SEDA-Council of Governments has reduced the cost of borrowing for an SBA 504 loan to further assist small businesses with the financing of their expansion needs.

SEDA-COG will cover half of the 0.5% fee on the bank loan involved in the financing package for SBA 504 loans approved by the SBA this year. For example, for a $1 million expansion project, borrowers would save $1,250. For much larger projects, the savings could be thousands of dollars.

For more information about this SBA 504 fee reduction or to learn more about the SBA 504 program for small businesses in Pennsylvania, visit www.sedacogldc.org or contact the Business Finance Department at 570-524-4491 or [email protected].

A reminder that the Chamber’s low interest loan fund now offers loans of up to $20,000. Call Fred Gaffney at the Chamber at 570-784-2522 for details.

Budget Hearings Get Underway in Harrisburg

Lawmakers on the House and Senate Appropriations Committees engaged in a somewhat tense exchange with Wolf administration officials last week as the first week of budget hearings kicked off.

In the most widely reported budget hearing, Budget Secretary Randy Albright faced off with Senate Republicans in the first Senate Appropriations budget hearing. Over five and a half hours, Albright defended the governor’s proposed $33.29 billion spending plan and warned of a $2 billion structural deficit going into the 2016-17 fiscal year. Sen. Randy Vulakovich, R-Allegheny, stated plainly that he and many other Senate Republicans had voted on the long-defunct “framework” agreement because there was an understanding that pension reform and liquor reform would be included in a final deal. With those two issues no longer on the table, he told Albright “You’re asking a lot… and you’re going to have to work a lot harder to get that (tax increase) vote out of me.”

Auditor General Eugene DePasquale appeared last week before the House and Senate Appropriations Committees, where he was asked whether he would be willing to audit Gov. Wolf’s expenditures during the first six months of the fiscal year when no spending had been authorized – a fact reported in the Pittsburgh Tribune Review. His office is now said to be reviewing the audit request. DePasquale also discussed school district borrowing during the budget impasse, saying that districts incurred up to $45 million in interest charges. He also warned that the six months of education funding the Governor approved in December will soon run dry; and that schools will need to borrow within a matter of weeks if the 2015-16 budget remains unresolved. Another important topic addressed during the Auditor General’s budget hearings was the Wolf administration’s intention to eliminate the Public Employee Retirement Commission, which analyzes municipal pension budgets. Calling PERC’s work “critical,” DePasquale said that independent analysis of the pension systems is necessary to address the real level of debt and work toward solutions on making the pension systems sustainable.

The House and Senate Appropriations Committees also hosted the Independent Fiscal Office last week. The IFO confirmed that the state faces a nearly $2 billion structural deficit for 2016-17 and there will be a residual shortfall of roughly $300 million this fiscal year; but that revenue estimates for 2015-16 are expected to be about $200 million more than originally anticipated. When asked how not replacing federal stimulus dollars would impact the structural deficit, IFO Director Matthew Knittel told House Appropriations members that the federal stimulus money was meant to be temporary and not meant for long term purposes. “Long term computations would not enter into the deficit projections,” he stated. “If the federal funds were there and then removed then I would think it would appear as though there were a deficit.” PLS also reported that when asked what portion of the increased expenditures in the proposed budget is caused by mandatory increases, Knittel noted that they are made up by pensions, debt and increases in certain programs in the Department of Human Services and the Department of Corrections.

Budget hearings continue this week.

What Services Are You Looking For?

The Columbia-Montour Partnership for Community Development has engaged National Travel Center (NTC) to investigate the possibility of moving the Chamber and Visitors Bureau from fair share membership dues to a hybrid structure where the amount assessed to each constituent depends on the services provided. Under such a structure, members have the opportunity to determine the specific package of services that benefit them most from a menu. Other chambers and visitors bureaus that have made this change believe the structure enables them to be more responsive to member needs.

Before deciding whether or not a change in membership structure is appropriate, we are holding a focus group meeting with members to brainstorm the types of services that would be of greatest benefit if offered by the Partnership. NTC will begin the session with information about the types of programs that are being offered by chambers and visitor bureaus. Participants will be encouraged to suggest services that would be particularly valuable, beyond any list offered by others. The focus group will be held on Wednesday, March 2nd at the Bloomsburg Fire Hall from 3:30 – 5:00 p.m.

Please consider taking the time to attend this focus group and provide your input.  To register, please click here.