From second-worst to first: How tax reform brought billions to Pennsylvania

Earlier this year, I attended a news conference where Gov. Josh Shapiro announced that Eli Lilly and Company would build a $3.5 billion pharmaceutical manufacturing facility in the Lehigh Valley.

As the governor rightly pointed out that day, the pledge from one of the world’s leading drugmakers represents the largest investment by a life sciences company in our Commonwealth’s history.

This historic announcement was especially meaningful to me as an Allentown native and a former state legislator who represented the Lehigh Valley for nearly three decades. I also found myself thinking that it wasn’t too long ago that major companies rarely considered Pennsylvania as a location for projects of this scope and significance.

Fortunately, Gov. Shapiro has changed that reality. He’s done it in part by developing the first statewide economic development strategy in nearly two decades and securing $550 million to make Pennsylvania more competitive for business expansion. These are major reasons why the governor has already secured more than $41 billion in private sector investment and created more than 24,000 new jobs since taking office — exceeding the previous 15 years combined.

Another important piece of this success story is the work the governor has done to improve what once was a very unwelcoming tax climate in our Commonwealth. Pennsylvania’s Corporate Net Income Tax (CNIT) rate continues to fall under the governor’s leadership, and we no longer suffer from the sticker shock that our prior CNIT rate — previously the second highest in the nation — caused prospective business projects.

Further helping the tax climate is the step the governor took when he signed legislation to increase net operating loss (NOL) deductions, putting businesses in a much stronger position to grow.

Add these investments and tax cuts to the others the governor has fought for , including the new Working Pennsylvanians Tax Credit that is expected to benefit as many as 940,000 Pennsylvanians this year, and we’re seeing evidence that these actions are helping to grow Pennsylvania’s economy.

Our agency recently reported that revenue collections for the current fiscal year are nearly $1 billion ahead of projections. Through 11 months of this fiscal year, Pennsylvania has collected $45 billion in General Fund revenue, nearly $928 million above the estimate — a clear indicator of the Commonwealth’s fiscal health. Strong collections from sales tax and employer withholding tax — which comprise about 60 percent of our overall tax revenue — are helping to fuel these positive results. Both are real-time indicators of the strength of our financial position and support the conclusion of a well-respected economist that Pennsylvania is the only state in the Northeast with a growing economy.

All of this progress has put us on firm ground to make the investments the governor outlined in his budget proposal for the 2026-27 fiscal year.

The governor’s spending plan supports students, strengthens public safety, lowers costs, creates jobs, and positions Pennsylvania for long-term growth. Strong revenue performance is what makes these investments possible without sacrificing fiscal discipline.

Pennsylvania is on the rise, but maintaining that momentum requires continued investment. By working with Gov. Shapiro to pass this budget, the General Assembly can help ensure our Commonwealth remains competitive, creates more jobs, and continues delivering results for Pennsylvanians.

Source: PennLive