Pennsylvania House Republicans are preparing a 10-bill package that would target business taxes, energy costs, housing supply, and other affordability issues as lawmakers work to make the state more competitive.
During a Sept. 1 field hearing held by the House Republican Policy Committee, committee chairman Rep. David Rowe (R-85) said affordability has been a central focus of the committee’s work.
“If we’re serious about making Pennsylvania more affordable, we have to examine how much Harrisburg is taking out of Pennsylvanians’ pockets,” Rowe said in opening remarks.
State Rep. Thomas Kutz (R-87) outlined the Growth and Affordability Plan, or GAP, saying the 10 bills will address seven sectors: child care, personal health and wellness, energy, small businesses, large businesses and new businesses, housing, and student loans.
The package is intended to reduce costs for families while improving Pennsylvania’s economic competitiveness, the lawmaker said.
“Economic growth and affordability. The two go hand in hand,” Kutz said. The plan, he said, “aims to reduce costs for families, strengthen economic competitiveness, and create an environment where both households and businesses can thrive.”
The hearing included testimony from representatives of the Pennsylvania Chamber of Business and Industry, PPL Electric Utilities, and Keller Williams of Central PA, giving them a chance to outline some of the policies they want lawmakers to include as Republicans develop the package.
Business tax changes
Neal Lesher, vice president of government affairs for the Pennsylvania Chamber of Business and Industry, urged lawmakers to go further on business-tax reductions.
Lesher backed accelerating the phase-down of Pennsylvania’s corporate net income tax beyond the rate currently scheduled for 2031.
He also called for allowing small businesses to use net operating losses, adopting a state and local tax deduction workaround, increasing the vendor discount, and eliminating accelerated sales-tax payments.
Pennsylvania has made progress since lawmakers began reducing the corporate net income tax in 2022, said Lesher, noting the state “started with the highest corporate net income tax in the country and we were stuck there for many years. Ultimately we have a long way to go.”
The rate now is 7.49 percent, he testified, adding that one of the proposals in GAP would reduce the rate beyond the level Pennsylvania is scheduled to reach in 2031.
He also pointed to Pennsylvania’s treatment of net operating losses, saying the state had historically limited the deduction to 40 percent, compared with the federal rate and most other states.
Lesher also tied affordability to civil litigation costs, testifying that changes to Pennsylvania’s civil justice system could help address rising insurance costs for child-care providers.
“I really don’t think you can have a conversation on affordability in Pennsylvania without at least touching on lawsuit abuse reform,” said Lesher.
Nix electricity tax
Shelby Linton-Keddie, senior director of public and external affairs for PPL Electric Utilities, focused on electricity costs, calling for elimination of Pennsylvania’s gross receipts tax (GRT) on electricity.
She estimated that eliminating the tax would save the average PPL residential customer about $12 per month, or roughly $150 annually. For small commercial customers, she said the tax amounts to $10.27 per month.
“As we are all acutely aware, Pennsylvania families today are facing a real affordability challenge,” said Linton-Keddie. “Customers are managing higher costs for housing, groceries, health care, and transportation, while electric bills overall have also increased significantly in recent years.”
Linton-Keddie attributed the “supermajority” of recent electric bill increases to rising wholesale electricity and capacity costs in the PJM Interconnection market.
Beyond the GRT, she said the company supports changes to Pennsylvania’s Alternative Energy Portfolio Standards Act, retail electricity-shopping reforms, and legislation allowing electric distribution companies to own generation as a backstop when the market does not provide enough supply to meet forecasted demand.
Housing supply concerns
Housing supply emerged as another business and economic-development issue, with Matt Madden, an operating principal with Keller Williams of Central PA, testifying that development constraints are contributing to the state’s ongoing shortage.
“Unlike many parts of the country, central Pennsylvania still is suffering from a massive housing shortage,” Madden said.
He described the housing market as “K-shaped,” with stronger competition at the upper end of the market while buyers at the lower end face fewer available homes and higher interest rates.
Additionally, he cited density and bulk-area restrictions, minimum square-footage and parking requirements, stormwater costs, and the National Pollutant Discharge Elimination System (NPDES) permitting process as obstacles to development.
“The one issue I would be remiss not to bring up is the NPDES process, and the inability to ever get a Notice of Termination on a property,” Madden said.
Madden called for predictable approval timelines, updates to zoning and the Municipalities Planning Code, greater flexibility for housing density and types, infrastructure support, and incentives for municipalities to plan for housing demand.
Rep. Kutz said the 10-bill package will be unveiled in October when lawmakers return to session.