PA Budget Stalemate Threatens to Hurt Job Creation

Future Economic Development Funding in Jeopardy Due to Recession

By Andrew Deichler (CoStar Group)

August 4, 2009

ES3's Facility in York, PA.

Pennsylvania Governor Ed Rendell said Monday that his office is providing incentives for grocery distributor ES3 LLC, to help the company expand its operations in York and create jobs. He also said that aiding such projects in the future might not be so easy.

Funding for projects like the ES3 expansion is drying up across the country as states hammer out budget shortfalls due to the recession.

In Pennsylvania, the Democratic governor and the predominately Democratic House of Representatives have been at a stalemate with the Republican-dominant Senate for the about two months over the state budget.

In short, the Democrats are proposing a personal income tax (PIT) increase to keep job-creation programs going, while the Republicans are in favor of cutting programs to avoid raising taxes.

The governor's office said in a statement that Pennsylvania might be unable to compete for such projects if certain programs are trimmed or completely eliminated in the state budget. "Some lawmakers are debating whether we should turn our backs on the communities and workers these valuable programs serve," said Gov. Rendell. "They want to drastically cut or eliminate the programs that, before the recession hit, helped us to reach record levels of employment."

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