By David Spigelmyer, Gene Barr, David Taylor
We begin 2018 with a national feeling of optimism as the economy is looking up. America’s unemployment rate holds at a 17-year low and confidence in the job market has hit record highs, according to national Gallup research.
Growth is fueling further optimism as a recent National Association of Manufacturers’ survey found 95 percent of American manufacturers have a positive economic outlook – the highest in the survey’s 20-year history.
Leaders in Washington are giving the greenlight to investment and job creation as unnecessary red tape has been slashed and much-needed tax relief is on the way.
We’re not surprised that Americans are feeling better about the direction of the nation’s economy.
Economic opportunities for Pennsylvania are swinging positive too, as the energy sector, manufacturing and other businesses in the Commonwealth see a better outlook on the horizon.
However, this positive momentum could be lost if our elected officials insist on enacting policies that will impede private sector growth and negatively impact our overall business climate.
The energy we produce here presents a generational opportunity for long-term, sustained economic growth. Driven by natural gas, a manufacturing revitalization is leading to a rebirth of good-paying, middle class jobs.
Investments such as the multibillion-dollar Shell petrochemical plant under construction in Beaver County – the Commonwealth’s largest project since World War II – are kicking off a revival in the industrial heartland.
A recent study by McKinsey & Co. predicts a $60 billion increase in gross domestic product over the next decade and more than 100,000 additional jobs from these developments.
That’s welcome news, as manufacturing has a more than $85 billion annual economic impact for the Commonwealth and directly employs more than a half-million Pennsylvanians.
This unprecedented opportunity extends beyond the shop floor. Clean-burning natural gas also is providing a growing share of affordable, domestic and around-the-clock electricity, while keeping more than half of Pennsylvania households warm this winter.
Residential gas bills have fallen by 40 percent, according to the University of Pennsylvania, and consumers here saved $7.1 billion on electricity in 2016 because of affordable, abundant and locally produced natural gas.
Notably, more gas-fired electricity has also helped the United States earn the top global spot in reducing carbon emissions.
As lawmakers in Harrisburg reconvene and look to tackle a wide range of policy challenges this year, a priority should be placed on enacting policies that promote a competitive business climate; which can provide the rocket fuel to launching sustained, long-term economic growth.
Making Pennsylvania the first choice for investment – whether it’s through pharmaceutical research, robotics development, advanced manufacturing or energy production – must be the focus for Gov. Tom Wolf and policymakers this year.
Establishing the right mix of taxes and regulations will play a major role in strengthening our competitiveness. Pennsylvania’s corporate tax policies, with the highest effective tax rate in the nation, put the Commonwealth at a competitive disadvantage.
What’s more, Pennsylvania natural gas producers already pay a special impact tax that has generated more than $1.2 billion, to the benefit of every community in the Commonwealth. Further exacerbating Pennsylvania’s tax climate by adopting higher punitive energy taxes erodes the competitive balance that our elected officials ought to be seeking.
Today’s overly-burdensome tax climate, excessive regulations that stifle growth and a chronic permitting logjam have made Pennsylvania’s tough business climate a deterrent to growth. In fact, a recent analysis from the Fraser Institute shows business leaders already see greater barriers to investment in the Commonwealth, with our tax and regulatory climate listed as “strong deterrents” to doing business here.
We know there’s broad support and common ground to be found for strengthening Pennsylvania’s business climate.
Let’s make 2018 the year where we enact policies that embrace our energy resources to fully realize the long-term economic opportunities ahead.
Gene Barr is president and CEO of the Pennsylvania Chamber of Business & Industry. David Spigelmyer is president of the Pittsburgh-based Marcellus Shale Coalition. David Taylor is president and CEO of the Pennsylvania Manufacturers’ Association.
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