State manufacturing reps outline pro-industry path for PA legislators

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Representatives of Pennsylvania’s manufacturers outlined industry-growth and job-creation concerns for state legislators during a Senate Community, Economic and Recreational Development Committee hearing held on Thursday, and offered solutions for moving the industry forward as a major economic driver for the state.

David Taylor, president and CEO of the Pennsylvania Manufacturers’ Association (PMA), testified that the most immediate challenges for manufacturers are in the areas of building its workforce and improving the state’s regulatory environment. In fact, there’s a critical need for qualified manufacturing workers, Taylor said. 

“The workforce crisis is real and is a hard cap on Pennsylvania’s economic growth,” he said. “Nationally, manufacturers are facing an alarming problem: our workforce is aging and retiring and there is a shortage of skilled hands” to fill their positions.

That’s also true in Pennsylvania, where at any given point in time there are roughly 6,000 open manufacturing positions available across the state, according to the Manufacturing Institute.

“Couple the current shortage with the fact that some companies have more than half of their current workforce within just a few years of retirement and we must consider this workforce problem to be a workforce crisis,” Taylor testified. “The glut of unfilled jobs due to this skills gap is likely to become an increasingly pressing problem.”

The solution, according to PMA, is to make the state a smart business decision for employers to locate, expand and hire rather than in one of its competitor states. “Regulations at the local, state and federal levels are suffocating business growth and investment throughout our Commonwealth,” Taylor said. “Over-regulation causes entrepreneurs to balk at developing, expanding or even creating a business in the first place.”

PMA supports reform of Pennsylvania’s regulatory process, which should undergo a systematic review to streamline processes, require legislative approval of the costliest and most consequential new regulations, and institute a system of regulatory budgeting to set maximum limits on the total costs of compliance for the private sector. 

“Ultimately, these changes will allow our elected representatives to ensure that proposed regulations achieve their intended goals while minimizing the impact on our job creators and economic vitality,” said Taylor, who acknowledged that “rightsizing the regulatory burden does remain a challenge.” 

Jenn Beer, vice president of government affairs for the Greater Pittsburgh Chamber of Commerce, pointed out that as Pennsylvania turns the corner on the COVID-19 pandemic, the state must seek to be better positioned to compete so that it can retain and attract businesses, especially in the manufacturing sector. 

Toward that goal, the chamber thinks state legislators should focus on two tracks to assist business growth and greater equitable economic growth: 1.) reform the state’s uncompetitive business tax structure, and 2.) implement policies that will aid and encourage business growth in the post-pandemic world, said Beer, who noted that Pennsylvania “still unfortunately [has] one of the least competitive corporate tax environments in the country.”

For example, to enhance competitiveness in manufacturing and other businesses, state lawmakers should materially reduce the corporate net income (CNI) tax rate and fully lift the cap on net operating loss carryforwards, Beer said. 

“With respect to the CNI rate, it is no secret that our flat 9.99 percent rate — the highest non-graduated CNI rate in the country — serves as a blinking red light for business attraction,” Beer explained during the hearing. “We have been told time and again by our economic development colleagues and site selectors that we frequently miss projects and deals — without even knowing we’ve been considered — because our CNI rate will cross us off lists before we’ve had a chance to compete in other areas.”

Growing manufacturing, particularly in southwestern Pennsylvania, should be a legislative priority, testified Jeff Nobers, executive director of the Builders Guild of Western Pennsylvania and Pittsburgh Works Together, an alliance of organized labor, corporate and civic leaders. 

Nobers reiterated his organization’s Get to Work & Build It Here Policy Agenda, which it released last year as an outline of several steps the state and federal government could take to help Pennsylvania take a leading role in reshoring manufacturing post-pandemic.

For instance, because energy production — both shale gas and electricity production — are among the state’s leading industries and help lower costs for manufacturers, the state “must avoid steps that would hamper the energy industry and the manufacturing companies they support,” said Nobers. “Abundant and affordable energy drives economies. We must take full advantage of this asset.”

Other manufacturing representatives testified during the hearing, including Drew Simpson, regional manager for the Eastern Atlantic States Regional Council of Carpenters; Ann Tumolo, director of government affairs for PPG Industries; and Eileen Anderson, director of government relations for the PA Manufacturer & Business Association.

State Senate committee members welcomed the testimonies as they discussed job-stifling regulations, economic development reform and tax incentives, among other issues.

“The state’s unemployment rate continues to trail behind other states as Pennsylvania emerges from the COVID pandemic,” said committee chairman Sen. John Yudichak, an independent representing the 14th District. “Pennsylvania’s working-class families are losing good paying manufacturing jobs at an alarming rate because of growing government barriers.”

State Sen. Devlin Robinson, a Republican representing the 37th District who hosted the hearing, said local employers are making choices now about how their futures in Pennsylvania will look. “It’s important that we take a deep dive into the role of government in how those decisions are playing out,” he said. “We need to focus on how we are going to create a stronger environment for job growth through regulatory reforms.”

“We received valuable insight today from numerous manufacturing, economic development and labor force stakeholders about steps that all levels of government — local, county, state and federal — can take to become partners in manufacturing growth, instead of adversaries,” Sen. Yudichak said.