Federal: Bipartisan Infrastructure Law Updates After 6 Months of Implementation
Over the last 180 days, the Biden-Harris Administration has announced over $110 billion in funding to rebuild roads and bridges, modernize ports and airports, replace lead pipes to deliver clean water, and expand high-speed internet. This includes funding for over 4,300 specific projects, touching over 3,200 communities across all 50 states, D.C., and Puerto Rico. In fact, 53 states and territories have appointed state infrastructure coordinators.
The Administration also released a new Permitting Action Plan to strengthen and accelerate federal permitting and environmental reviews by fully leveraging existing permitting authorities, as well as new provisions in the Bipartisan Infrastructure Law.
Please feel free to also reference the Bipartisan Infrastructure Law Guidebook—which is a roadmap to the funding available under the law, as well as an explanatory document that shows program-by-program information—in addition to an up-to-date map of the announced infrastructure project locations nationwide, and Chester County has 3 project locations announced currently.
State: Corporate Net Income Tax Reduction Proposal is a Win for Pennsylvania Businesses
Gov. Tom Wolf’s 2022-23 state budget proposal comes at a time of relatively positive fiscal conditions, with higher than anticipated revenue collections and billions of dollars in unspent coronavirus relief funding, which are expected to facilitate smoother budget negotiations. The $43.7 billion proposed spending plan is an aggressive double-digit increase over the 2021-22 enacted budget.
The proposal includes $11.6 billion for K-12 public education funding – a $1.55 billion increase. The proposal included no broad-based tax increases, and for the first time in eight years, no additional tax on the natural gas industry.
Gov. Wolf’s budget proposal includes reducing the Corporate Net Income (CNI) tax rate – a PA Chamber and Chester County Chamber top priority – from 9.99 percent to 7.99 percent on Jan. 1, 2023, with a reduction to 6.99 percent in tax year 2026 on a path to 4.99 percent. However, employers have expressed concern with the proposal’s subjective expansion of the state’s taxing authority, citing the need for clear, predictable standards for employers to follow.
At 9.99 percent, Pennsylvania has the unfortunate distinction of imposing the country’s second-highest CNI tax. The state’s disproportionately high CNI serves as a major red flag to potential investors and puts the Commonwealth at a distinct disadvantage as businesses look to other pro-growth states to open or expand operations. The state’s excessively high CNI rate was undoubtedly a major factor in PA failing to get any consideration for the $20 billion investment that Intel announced for Ohio. This comes on the heels of PA’s failure to attract two major steel manufacturing facilities – each one being a $1 billion investment – that were not made in PA due to the CNI and excessive regulatory cost.
Despite a pessimistic outlook held by many, understandably, we have seen positive news in the last few weeks. The PA House passed legislation to lower the CNI to 8.99 in 2023, with triggers for further reduction contingent upon further budget surplus. The bill, introduced by state Rep. Kail (R-15), passed the house in a bi-partisan vote of 195-8. Further, we see additional legislation to reduce the CNI in the State Senate.
As budget deliberations continue towards the June 30th State Budget deadline, we will see the Senate and House continue to move legislation forward to the Governor’s desk. We encourage our lawmakers to stay true to the principles of competitiveness, fairness, and predictability and advance substantial, long-overdue tax reform for businesses of all sizes. We also urge policymakers to address the Commonwealth’s unemployment compensation debt head-on, thereby avoiding a tax increase on all of the state’s job creators.
Last week, the Bureau of Labor Statistics released the Consumer Price Index (CPI), which measures the change over time in the price of consumer goods. The new numbers for April 2022 show a 0.3% rise in the cost of goods and services from March, up 8.3% in the last year, with energy and food being the largest contributors to rising prices.
Please click here to download an economic conditions slide deck from the U.S. Chamber of Commerce economic policy division. As you will see, risks of a recession in the next 1-2 years are rising because of inflation and the Federal Reserve is raising rates to combat it.
For Our Members:
The Chamber is committed to advancing policies that will help Chester County businesses emerge from the pandemic, encourage investment and create jobs in the county, and attract new and emerging industries to the county and Commonwealth. We will continue to work with lawmakers to pursue a public policy agenda to advance our state’s competitiveness through tax reform; workforce development and career readiness; flexibility in energy markets; balanced labor laws; and responsible state spending. If you have a legislative agenda item that you would like us to explore, do not hesitate to reach out. We are here to advocate for YOU.
Laura Manion, MPA
President & CEO
Chester County Chamber of Business and Industry
1600 Paoli Pike, Malvern, PA 19355