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House Republicans’ “Marcellus Works” Bills on the Move

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The “Marcellus Works” package of bills is designed to spur job growth through the increased use of Pennsylvania’s home-grown natural gas, and the House Finance Committee has just advanced a series of tax credits for natural gas vehicle fleets, heavy-duty trucks and fueling stations. 

“With the high unemployment, we know that the Marcellus Shale industry – and now with the discovery of oil in this state – is a big plus for this Commonwealth,” state Rep. Stan Saylor (R-York) told the committee.  “It is time for us to start using our own resources to benefit Pennsylvania citizens.” 

Saylor is the prime sponsor of HB 301, which would provide tax credits for companies that utilize natural gas in their vehicle fleets. 

Several Democrats on the Finance Committee voted in favor of the bills, but minority Chair Phyllis Mundy (D-Luzerne) argued that corporate tax breaks do not pave the road to economic prosperity.  “We have gone way too far with this notion,” she says.  “This is trickle-down economics at its worst.” 

Up next for the tax credit bills is the state House, while five more “Marcellus Works” bills await possible Wednesday action in the House Environmental Resources and Energy Committee.

RadioPA Roundtable

Radio PA Roundtable 03.15.13

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On this week’s Radio PA Roundtable, Brad Christman and Matt Paul sit down with Governor Tom Corbett to discuss his slumping poll numbers and the state of the economy.

This week’s show also features an explanation of the “Pay-to-Play” scandal at the Turnpike that’s resulted in criminal charges, and we’ll hear Harrisburg Bishop Joseph McFadden’s thoughts on Pope Francis. 

Radio PA Roundtable is a 30-minute program featuring in-depth reporting on the top news stories of the week.

Click the audio player below to hear the full broadcast:

[audio:https://s3.amazonaws.com/witfaudio/radiopa/Roundtable03-15-13.mp3]

Labor Secretary Defends PA Jobs Climate

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Through three weeks of state budget hearings Senate Democratic Appropriations Chairman Vincent Hughes (D-Philadelphia) has repeatedly pointed out the fact that – for the first time in years – Pennsylvania’s unemployment rate is now worse than the national average.  So he took issue with Labor & Industry Secretary Julia Hearthway’s positive assessment of the state’s economy.  “How can you sit here and say – we were 8th in job creation, now we’re 34th in new job creation – that we’re going in the right direction?”

Hearthway was ready with her response.  On the job creation issue she notes that 42-states lost more jobs than Pennsylvania did during the recession, so some of them are now posting sharper increases simply because they have more ground to make up. 

As for the state’s persistently high unemployment rate, Hearthway cautioned that we can’t look at any of these figures in a vacuum.  “When you grow your labor force… you’re unemployment’s going to show higher,” she explained. 

Hearthway boasts of a state labor force that now stands at 6.56-million, breaking records in each of the past four months.  “That means individuals who have dropped out [of the labor force], not looking, are now looking again… it’s usually the first indicator of your economy coming back strong.” 

The latest numbers, for December 2012, show a 7.9% statewide unemployment rate.  A new jobs report may shed some more light on the situation.  It’s due out on Friday.

Should Family Businesses Pay the “Death Tax”?

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Family farms are now exempt from the Pennsylvania inheritance tax under a new state law enacted last year.  Now there appears to be bipartisan support for doing the same thing for family businesses.  “When we tax these assets in a small business… at the death of one of the principle owners, oftentimes what happens… is critical business assets have to be liquidated in order to pay the tax bill,” explains state Rep. Stephen Bloom (R-Cumberland), the prime sponsor of a bill to eliminate the so-called death tax on mom & pop shops. 

Bloom’s bill has already advanced out of the House Finance Committee with a vote of 20 – 4, and has since been re-referred to the Appropriations Committee. 

While the bill would nix close to $10-million dollars in state revenue, Bloom believes the economic activity it would create can more than make up for the cost.  “We want to reward our folks who’ve been frugal and generated assets and are growing jobs in this state we don’t want to punish them.”    

Opponents have several complaints in addition to the lack of offsetting revenue.  The Pennsylvania Budget & Policy Center believes the bill would create a new set of inequities and loopholes, thereby shifting more of the state’s tax burden onto middle-class families. 

The House has recessed for three weeks of budget hearings.  Session is scheduled to resume on March 11th.

Report, Gov. Tout Marcellus Shale as Economic Driver

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The shale energy industry is projected to support over 220,000 direct and indirect Pennsylvania jobs by 2020, according to a new study from the US Chamber’s Energy Institute.  The industry is also on pace to generate $2.3-billion dollars a year in state & local taxes by that same time. 

“There are so many possibilities here as we develop this resource responsibly, and move forward with it, that I think it holds great promise for Pennsylvania” says PA Chamber of Business and Industry President & CEO Gene Barr.  He says continued progress will help put a stop to imported oil. 

Responding to a listener question on the “Ask the Governor” program, this month, Governor Tom Corbett reaffirmed his opposition to a severance tax.  He pointed not only to the corporate tax revenue already being generated, but to the $200-million dollars collected in the first year of impact fees. 

The governor is eager to see the natural gas industry reach its full potential in the Keystone State, saying his focus is on increasing demand through the conversion of vehicle fleets and buildings to natural gas power.  “We can’t look at this industry as what’s there today, it’s what’s going to be there 10, 20, 30 years from now, and it’s going to continue to grow,” says Corbett. 

He says there are indications the Marcellus Shale play is bigger than first thought.  While the low cost of natural gas tamped down the number of new wells being drilled in 2012, production is surging in the Marcellus Shale.

Youth Employment is Low, PA Fares Better than Most

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A new report from the Annie E. Casey Foundation pegs the nation’s teen employment rate at 26%.  Director of Economic Development & Integration Initiatives Patrice Cromwell tells Radio PA we haven’t seen numbers like this since the early 1950s.  “Just in the last ten years, it’s dropped by close to 50%,” she explains. “Back in 2000, one out of two teens was able to get a job; today that’s only one out of four.” 

She says youth employment is important because the data show that early work experience pays off later in life, so work experience is critical whether a young person is in or out of school.

The new KIDS COUNT report shows teen employment rates varying among states, from a low of 18% in California to a high of 46% in North Dakota.  Pennsylvania is among the top states with a teen (16-19-years old) employment rate of 39%. 

When the report looks young adults (20-24-years-old) Pennsylvania shows 62% employment, one percentage point higher than the national average.

PA Budget Debate

Closing in on the Fiscal Cliff

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The federal government is less than a month away from driving straight off the “fiscal cliff,” but U.S. Senator Pat Toomey (R-PA) believes there’s still time to avoid it.  “The great dangers of the fiscal cliff are the massive tax increases that are scheduled to go into effect on January 1st,” Toomey told reporters on a recent conference call.  “If that were to happen, it would very likely throw the economy into a recession and cost us hundreds of thousands – if not over a million – jobs.”

Toomey is in the thick of Senate discussions, and has been meeting privately with Democratic Senators in an effort to broaden support for a plan he first put forward in last year’s Super Committee.  It would call for lower income tax rates for all – with limitations on deductions, loopholes and write-offs that will raise hundreds of billions of dollars in net revenue over time. 

Inaction will lead to rate hikes on income taxes, estate taxes, dividends and capital gains.  The White House says a median-income Pennsylvania family of four (earning $80,400) could see its income taxes rise by $2,200.  A 2-percentage point payroll tax cut would also expire.      

But that’s just the tax hike side of the equation.  The fiscal cliff also includes $1.2-trillion dollars in federal spending cuts over the next ten years. 

Professor David Passmore with Penn State’s Institute for Research in Training and Development crunched the numbers to see how sequestration alone would affect the Keystone State.  “Pennsylvania’s share would be in the order of 35 – 40,000 jobs; the loss of about $6-billion in total economic output; about $3.5-billion in industry sales; and about $2.1-billion in after tax personal income,” he explains to Radio PA.  The report was first published in Pennsylvania Business Central.   

Like Toomey, Passmore believes the “fiscal cliff” is the recipe for another tough recession.

First Democrat Enters Gov’s Race

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The field of Democrats seeking to unseat Governor Tom Corbett may get crowded by 2014, but for today there’s only one.  John Hanger, a former Department of Environmental Protection (DEP) Secretary under Governor Ed Rendell, is touring the state to kick off his gubernatorial bid. 

Hanger wants to reverse education budget cuts and tax natural gas drillers.  “In September and October, for the first time in years, Pennsylvania’s unemployment rate went above the national rate,” Hanger pointed out during a stop at the state capitol.  “That’s an extraordinary thing because of the gas boom and the gas opportunity that we have here.” 

The Republican Party of Pennsylvania has already fired back, issuing a statement that reads: “…The Corbett record of responsibility and success is a stark contrast from the broken, bloated and unsustainable state government that tax-and-spend politicians like Ed Rendell and John Hanger helped to create…” 

October’s statewide unemployment rate stood at 8.1%.  While it’s above the national rate, data from the Department of Labor & Industry also show that Pennsylvania has added 105,700 private sector jobs since Corbett took office.    

A November Quinnipiac Poll finds that PA voters are somewhat divided on the job Governor Corbett is doing: 40% approve, 38% disapprove.