On Monday, I attended a meeting of local municipal leaders. These commissioners, supervisors, mayors and borough council presidents are dedicated civil servants, most of whom receive little or no compensation.
Topics of discussion included roads, infrastructure, stormwater management, local policing and the opioid epidemic. Dealing with these issues is essential to maintaining our way of life, and each of them requires ever-increasing levels of funding.
In many instances, our municipalities lack the necessary revenue to sufficiently tackle these problems. They are simply tapped out, so they look to the state for help. But where does the state get that money? Well, a variety of sources of course, but the majority of it comes from payroll taxes, business taxes or the federal government, which in turn is largely funded by payroll and business taxes and fees. In short, virtually all of the money that sustains our way of life comes directly or indirectly from business. The government does not create wealth. It only wastes or redistributes it.
So why, as our municipalities struggle to make ends meet, our population ages, and our children and grandchildren leave for green pastures, do so many people continue to hinder, penalize and even villainize business? What we should be doing is thanking our business community, encouraging entrepreneurship, and doing all we can to attract and retain great companies.
Sadly, a March USA Today report ranked Pennsylvania 39th - behind states like New York and New Jersey - on the list of best states to start a business. This is, unfortunately, not surprising. Most any study you read on economic climate will place Pennsylvania in the bottom 25%.
Why is that? Specifically, I would site four major reasons, each of which could warrant a lengthy article in its own right:
Taxes - Pennsylvania is the state of taxes. It never ends. Property taxes are very detrimental to our local economy, and statewide our 9.99% Corporate Net Income tax is second only to Iowa.
Regulation - The state of Pennsylvania has 159,000 regulations, nearly twice the number in Canada. More importantly, the culture at the Department of Environmental Protection (DEP) is toxic to business. Rather than fulfill its mission of ensuring the environmental safety of projects, DEP routinely find reasons to delay and kill good projects. This attitude hurts and hinders our economy on a daily basis.
Permitting - Thanks again to the state DEP, as well as a barrage of unique local ordinances (York County alone has 72 municipalities), permits that take 30-90 days in neighboring states may take up to two years in Pennsylvania.
Litigation - Philadelphia is one of the nation’s 10 worst cities for civil lawsuits. It is impossible to fathom the amount of damage the Philadelphia trial lawyers have done and continue to do to our Commonwealth. They even sued the Salvation Army for $227 million because someone else’s building fell on one of their thrift stores. Why in the world would good businesses subject themselves to this kind of abuse when we are surrounded by states that welcome and appreciate them?
What are we doing about it? First, let me commend my York County colleagues, Sen. Kristin Phillips-Hill and Reps. Kate Klunk and Dawn Keefer, for recently introducing a package of regulatory reform bills designed to cut government red tape. Second, Speaker of the House Mike Turzai and members of state House leadership deserve recognition for championing regulatory and permitting reform as part of the Energize PA initiative. Finally, let me share the exciting news that we’ve just announced the formation of a new Economic Growth Caucus comprised of more than 15 House members with real-world business experience and a stated mission of sharing our collective experience to propose, vet and support pro-economic growth bills and initiatives. I am honored to have been asked to chair this caucus. We look forward to engaging with the business community and to letting them know that they are once again valued and appreciated in Pennsylvania.
Recent successes in holding the line on attempts to increase taxes and create new ones have allowed Pennsylvania to turn around its economic “ship.” There is still work to be done if we are to realize our full potential, and I look forward to working with my colleagues to accomplish our goals.
Representative Mike Jones
93rd Legislative District
Pennsylvania House of Representatives
Media Contact: Scott Little