June 2007

How long can business prop-up the economy?

It was prolific U.S. bank robber Willie Sutton, who upon his arrest in 1952, was asked why he robbed banks?

His reply was matter-of-fact.

“I rob banks because that’s where the money is.”

I suspect that Governor Ed Rendell and members of his administration would have a similar answer if asked why Pennsylvania’s businesses are constantly the targets of efforts to bring more money into the Commonwealth’s coffers. If that’s truly where the money is, there’s becoming a growing sentiment that the governor had better tap it quickly. At least before the companies that have successfully spurred economic development begin rebuilding assets in some other part of the country.

Pennsylvania continues to be an atrocity for business creation, expansion and relocation. That’s the big three in the economic development picture Relocation probably doesn’t belong with the other two since it seldom happens here anymore. What state, after all, would you be doing business in where moving to Pennsylvania would be an upgrade?

The Pennsylvania Chamber of Business and Industry, the organization whose mission it is to advocate on behalf of business and to work with local chambers like ours to make sure that business stays on the radar screens of the media and state legislators , has already sized-up the opponent and seems undaunted by the mismatch. Provided of course that the grassroots efforts directed at chambers – big and small – throughout the Commonwealth gets the response necessary to make the governor think twice.

Let’s look at what the Rendell Administration is proposing and see how much of it looks like a good idea for business:

Gross Profits Tax on certain companies that earn “excess” profits ($760 million). For now this is aimed at the oil industry to direct greater funding to Pennsylvania’s transportation crisis. While that target may seem justified, the message to all businesses is clear: It’s okay to be successful. Just not too successful.

Healthcare Payroll Tax (120.8 million). A tax of 3.0% on all businesses (but returned if your healthcare meet the criteria set by the state). This, however, is the tip of the iceburg. The governor’s healthcare tax plan relies on declining revenue sources and uncertain revenue projections. It means more money and increased paperwork year-after-year from the business community.

Electric Tax ($75 million). This new per-kilowatt-hour tax on electricity would hit industrial users extremely hard. The governor is heavily into alternative sources of energy and wants business to foot the bill for that too. He reminds us, however, that the good news is that the bills for industrial users will be capped at $10,000-per-year. Is that really good news?

Trash Tax ($46.1 million). The Rendell Administration’s plan is to add $2.75-per-ton to landfill tipping fees, bringing the total to $9.00-per-ton, an increase of 350% since 2005. On the horizon: Increases in waste permit application fees.

Increased Sales Tax ($400 million). Despite opposition from practically all factions of business, the governor wants to raise the state sales tax from 6% to 7%. We aren’t competitive with adjoining states anyway. Why not widen that gap? The money generated by the sales tax increase would be earmarked for residential property tax relief and plug holes in the state budget.

Sick yet? You will be unless you can help convince legislators in both houses of the General Assembly to just say no. As you’ve probably guessed, you can’t carry that banner alone. But the 1,000 members of the Blair County Chamber, working in concert with nearly 150 chambers from throughout the state, can send the message loud and clear. Let us hear from you. Your Legislative Action Committee is poised to work on your behalf to stop this nonsense.

A unified effort of law enforcement officials stopped Willie Sutton from robbing any more banks. A unified effort of businesses in Pennsylvania can have the same impact. Call me today at 943-8151 to pledge your support toward returning Pennsylvania to a state where business can be the leader rather than the victim. We’re not looking for your money. You’ve already invested that in becoming a Chamber member. We need your influence and a little bit of your time.

Without it, we’re all in big trouble.

Past Chamber Notes

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