Pa. business sector tells GOP committee of worries about minimum wage, taxes, pensions
Kristen Ranker wants to expand her business, a convenience store known for its subs and sandwiches, but she said she worries about a minimum wage increase and proposed tax increases, she told state lawmakers Wednesday.
Ranker, who's owned the long-standing Schaeffer's Corner Market in Ruffsdale for four years, said she'd like to double the number of employees but couldn't afford that if the federal minimum wage is increased to $10.10 an hour or if business taxes increase at the state level. President Obama called for the federal minimum wage to increase from $7.25 to $10.10 an hour in his 2014 State of the Union address.
“The jobs are ... not huge. (Employees) are not making millions, but it's sustaining that community,” Ranker told the state House Majority Policy Committee during a hearing at Westmoreland County Community College near Youngwood. “I want to grow; I don't want to reduce. There is so much more opportunity there.”
The committee, composed of Republicans, has been traveling the state to gather information about the job climate, economic growth and job-training readiness, said Rep. Kerry Benninghoff, R-Centre County, the chairman.
Business advocates railed against proposals by Democratic Gov. Tom Wolf to raise the personal income tax, raise and expand the sales tax, and implement a severance tax on natural gas extraction.
Neal Lesher, legislative director for the National Federation of Independent Businesses in Pennsylvania, said 80 percent of his members pay the personal income tax rate, and an increase “takes away working capital from our businesses and makes it harder to grow.”
Alex Halper, government affairs director for the Pennsylvania Chamber of Business and Industry, echoed those concerns but said pension reform is the No. 1 concern for his members.
“The common thread we've seen is the rising cost of pensions,” Halper said. He said his members have transitioned to primarily offering 401(k)-style plans as a result of the “fiscal realities of funding retirements.”
“It's time for the state to acknowledge these realities,” Halper said.
David Taylor, president of the Pennsylvania Manufacturers' Association, told lawmakers he opposes Wolf's proposed severance tax on natural gas.
He said natural gas drilling is what's paying workers' salaries, benefits and pensions and “revitalizing rural communities that haven't seen prosperity.” He wants drillers and the related manufacturers and businesses they support to stay in Pennsylvania.
“We put all of that at risk with an industry-specific tax,” said Taylor. “We live in a world where talent and money are more mobile than (they have) ever been before.”
“By imposing a 5 percent severance tax, we're going to be able to fund our schools for a change,” said Jeff Sheridan, spokesman for Wolf. He said the state's Independent Fiscal Office projected that the tax will raise $1.58 billion in 2018-19.
Patrick Gerity, who oversees WCCC's workforce development programs, said the college offers specialized training programs in energy industry jobs, including a training devised specifically for Chevron employees and subcontractors.
The college has been growing its natural gas training programs since it won a federal grant in 2010 for ShaleNET, but soon a second round of federal funding will run out.
“We're hoping that with the new budget, there will be money set aside for job training in manufacturing and natural gas to enable us to continue growing,” Gerity said.
Sheridan said the governor has several proposals that will help businesses, including a proposed cut in the corporate net income tax and money for job training. The increase in the sales and personal income taxes would go toward cutting property taxes for residents and businesses.
Wolf and the General Assembly, which is controlled by Republicans, must agree to a state budget for the 2015-16 fiscal year by June 30.
Kari Andren is a staff writer for Trib Total Media. She can be reached at 724-850-2856 or firstname.lastname@example.org. Staff writer Matt Faye contributed.