OPED: Government overreach threatens Pa.'s future

Beth Anne Mumford
Americans for Prosperity
A woman crosses the South Street Bridge spanning the Schuylkill River and view of the Philadelphia skyline, Wednesday, Oct. 18, 2017. The cities of Philadelphia and Pittsburgh are both attempting to draw Amazon to build its second headquarters in Pennsylvania. (AP Photo/Matt Rourke)

Blessed with abundant natural resources, a skilled workforce and some of the nation’s top universities, Pennsylvania is a place filled with promise — a state where businesses can grow and people of all backgrounds can get ahead.

With the passage of federal tax reform, the Keystone State is on the cusp of fulfilling its economic potential, so long as Harrisburg is wise enough to stay out of the way. Unfortunately, it seems that Gov. Tom Wolf and some in the Legislature are doing all they can to thwart Pennsylvania’s promise with over-regulation, high taxes and wasteful spending.

Take the governor’s new proposal to double the salary threshold under which full-time workers are eligible for overtime pay.

If the aim of the policy is to help workers, then it is bound to backfire. The rule would simply foist new compliance costs on businesses, which could force them to cut hours and wages. In the words of Nathan Benefield of the Commonwealth Foundation, “Gov. Wolf can no more mandate that every Pennsylvania worker earn more money than he can mandate that every family has a pet unicorn.”

The legislature knows the rule will do more harm than good, which is why the governor has been forced to circumvent lawmakers and enact the new rule by executive fiat. It’s not the first time he has resorted to such a tactic to push through his job-killing ideas. 

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On Dec. 22, the same day President Donald Trump signed the Tax Cuts and Jobs Act into law, Wolf quietly modified Pennsylvania’s tax policies to prevent businesses from taking full advantage of newly lowered rates on capital investments. The Pennsylvania Manufacturers’ Association says the change will lead to hundreds of millions in additional taxes and unnecessary administrative costs.

At a time when many businesses in the United States are looking to expand their operations, the governor’s action will serve as a warning to business owners to take their companies — and jobs — elsewhere. Rather than work to build a favorable business climate to attract new investment, Wolf has taken to lure large corporations such as Amazon with taxpayer money.

FILE - This Dec. 16, 2012, file photo shows the skyline at night of Austin, Texas. Austin is one of the many cities vying to land Amazon's second headquarters. While Texas cities trying to land the new headquarters have been vocal about why they think they should win, they've resisted releasing copies of their proposals. (Jay Janner/Austin American-Statesman via AP, File)

Both Pittsburgh and Philadelphia are on the shortlist of cities being considered for the site of Amazon’s second headquarters. If either city were chosen, Amazon would receive a hefty package of economic incentives at taxpayers’ expense.

Wolf refuses to release the details of Pennsylvania’s offer, but it would probably be the biggest ever rewarded by the state, according to Community and Economic Development Secretary Dennis Davin. In other words, it would likely outweigh even the $1.7 billion tax handout given to Shell Oil Co. to build a petrochemical refinery in western Pennsylvania.

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Such corporate welfare schemes rarely deliver the promised jobs or tax revenue, and they unfairly benefit large corporations at the expense of the little guy. There are more than 1 million small businesses in Pennsylvania, employing just under half of all private-sector employees. They may not generate headlines like Amazon does, but they are no less important to the overall economy, and they deserve fair and equal tax treatment.

If state lawmakers want to create growth and opportunity, they should lower taxes for everyone rather than cut deals with politically-favored corporations. They should also target the more than 153,000 state regulations that are weighing down our economy. A package of regulatory reform bills was recently introduced in the General Assembly —why not start there?

Leaders in Washington have done much to eliminate barriers to prosperity and increase economic opportunity over the last year, but lawmakers in Harrisburg aren’t matching their successes. We cannot make good on Pennsylvania’s promise until state lawmakers pass their own reforms to increase government transparency, lower taxes and eliminate the regulatory burdens that are holding us back.

— Beth Anne Mumford is the Pennsylvania state director of Americans for Prosperity.