During a tour of Lehigh Valley Plastics today, Gov. Tom Corbett said the Bethlehem Township, Pa., plastic manufacturer is an example of what both business and government should do to survive tough times.
The 42-year-old company survived the recent economic recession and is almost back to its prerecession revenue and employment levels, Corbett said.
“What business does, government needs to do, which is control our costs,” he said, referring to his recent budget proposal that slightly cuts state spending. “You are the people who create the jobs — it’s not the government sector.”
Corbett has made similar visits to a Northumberland County environmental services company and a Lancaster County wire manufacturer since announcing his $27.14 billion budget plan Tuesday.
Corbett said his budget encourages the growth of private industry in the state by not raising business taxes. He said he is impressed by the Lehigh Valley’s ability to attract businesses from New Jersey, specifically citing Ocean Spray’s planned move from Bordentown, N.J., to Upper Macungie Township.
“One of the reasons, I believe, is because we’re competitive,” Corbett said.
“We’re going to have very cheap power for the manufacturing industry,” he added, referring to the state’s burgeoning natural gas industry.
Corbett’s commitment to not raising business taxes includes not implementing a specific tax on natural gas extraction, he said. When asked if he would consider one, he asked the Lehigh Valley Plastics employees “how many people think this company should pay an extra tax because you’re making money?” The question was greeted with hearty laughter.
Corbett said natural gas companies pay all the state business taxes like other industries and shouldn’t be subject to taxes on top of those he is considering, like a local impact fee for affected municipalities and counties.
Lehigh Valley Plastics President Dave Keim said he likes Corbett’s positions on industry, especially the possibility of tax credits for job creation.
“The less taxes, the more we can spend to expand our business,” he said.
Lehigh Valley Plastics moved to its North Commerce Way facility in 2006 after 35 years in Allentown. The larger facility was intended to allow for expansion, and the company’s workforce grew from 115 to 155 from 2006 to 2008, Keim said.
The recession forced the company to cut staff to 120 but management hopes to hire an additional 10 employees this year, he said.
The company also is within 2 percent of its prerecession $25 million annual revenue and plans to top that number this year, he said. The company manufactures plastic components for a number of markets, including agriculture, construction, transportation, pharmaceuticals and gaming.
Corbett said maintaining taxes is key for job growth. The Pennsylvania Democratic Party today in a news release, however, pointed out that Corbett’s further cuts to education will cause both increased property taxes and more lost teacher jobs.
Corbett has proposed between 4 and 30 percent cuts to higher education and an almost $1 billion cut to K-12 education, according to education officials.
Corbett admitted that his K-12 education cuts have lead to teacher layoffs and increased property taxes but he said it’s not his fault federal stimulus money for education dried up.
“Each school district is run by their own board of directors,” he said. “They have to control their costs.”