Competing with states such as North and South Carolina to lure businesses and jobs, Pennsylvania offers grants and other incentives to help close deals. But in the end, factors such as quality of life, a trained workforce, educational opportunities and location to markets might drive a company’s decision to relocate.
“It’s hard to say anyone else, from a location point of view, is as competitive. We are the Keystone State,” said Scott Dunkelberger, deputy secretary of business assistance at the Department of Community and Economic Development.
One theory is that the nickname came from Pennsylvania’s location among the 13 original colonies. Pennsylvania today has access to interstate highways and railways for companies to move products to market, Dunkelberger said. Moreover, “we have a long history of knowing how to make things.”
The “cost of doing business” in Pennsylvania versus another location can drive a company’s decision to move or remain here.
“We see people moving back to Pennsylvania because of our workforce,” Dunkelberger said.
Pennsylvania is competing with Ohio and West Virgina to get a plant in a new industry for converting shale gas into a building block for plastic products. The Marcellus shale fee and regulation bill, enacted recently, contained funding of almost $12 million over three years for DCED to lure a so-called “cracker plant” in Western Pennsylvania and convert refineries in Southeastern Pennsylvania.
In a few weeks, Royal Dutch will choose the site for its petrochemical plant, which today could provide hundreds of jobs at $60,000 or more.
State tax rates are one factor businesses consider, Dunkelberger said, acknowledging that Pennsylvania is not helped by having one of the highest corporate net income taxes in the country.
Steve Kratz, DCED’s press secretary, said the Fair Share Act that the Legislature passed in 2011 “will help us compete for jobs.”
With the support of Republican Gov. Tom Corbett, lawmakers enacted lawsuit reform aimed at ending situations where lesser defendants in civil law lawsuits could be held responsible for 100 percent of the damages. Corbett signed the bill in June, calling it “a critical step to improve the state’s legal climate.”
Pennsylvania tries to make it easy for companies seeking state assistance. The Corbett administration combined three grant programs into the Pennsylvania First program, which DCED touts as a “comprehensive funding tool” with a $25 million pot. Companies can use the grants to help cover relocation costs if they come here, Dunkelberger said.
Typically, DCED caps the grants at $5,000 per job; the average is $2,300 per job, Dunkelberger said.
Other programs the agency offers include:
• Keystone Opportunity Zones — Tax-free zones where companies can locate that waive state and local taxes usually for 10 years. That includes property taxes and business taxes such as the CNI and the Capital Stock and Franchise Tax on assets.
• Research and Development Tax Credit — Provides $1,000 tax credit per job for businesses creating 25 or more full-time jobs or increasing employment by 20 percent over three years.
• Machinery and Equipment Loan Fund — Low-interest loans to acquire and install new or used machinery and equipment, or to upgrade equipment.
• Pennsylvania Industrial Development Authority — Low-interest loan financing for land acquisition, construction or renovation resulting in job creation.
• Customized Job Training Program — Grants for specialized training for new or existing employees.
• Industrial Sites Reuse Program — Grants and low-interest loans to perform environmental site assessment and remediation.
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