How To Make Pennsylvania Manufacturing Boom
President Donald Trump and Gov. Josh Shapiro can agree on one thing: Pennsylvania needs a manufacturing boom. Political talk and regulatory action, however, are two different matters entirely. While the president is doing his part to incentivize manufacturing in Pennsylvania, Shapiro has done virtually nothing to eliminate the many barriers standing in the way of new factories and good-paying jobs.
It all comes down to a single word: overregulation. In Washington, Trump is cutting the red tape that handcuffs manufacturers. His administration is repealing ten federal mandates for every new regulation, unleashing affordable energy, and stopping his predecessor’s new regulations estimated to cost our economy $180 billion. By getting bureaucrats out of the way, the president is making it easier for manufacturers to invest in America.
This is particularly important for Pennsylvania, which has the potential to be a key player in the plastics manufacturing sector. Since plastics require fossil fuels to produce and our commonwealth is one of the largest oil and gas producers, it makes sense for us to be a natural place for businesses to build factories. Before Shapiro’s election, many companies opened plants across our state to create plastics or recycling centers.
There’s no guarantee that new factories and jobs will come to Pennsylvania, however, thanks to the heavy-handed mandates of state and local leaders. Pennsylvania is the 14th most regulated state in the United States, with more than 164,000 regulatory restrictions. One of the biggest barriers is our broken permitting system, which blocks big projects for years on end while making them even more costly.
Ultimately, Pennsylvania just isn’t attractive for manufacturers. If Shapiro truly wants a manufacturing boom, he should follow Trump’s lead in slashing red tape for all businesses, and the sooner the better.
The need for state action is clear in the ever-lengthening list of companies closing factories in Pennsylvania, choosing other states for new facilities, and even reversing decisions to invest here.
Last year, a Texas company canceled plans for the largest plastics factory in the country, about 60 miles north of Harrisburg. FairLife considered building a milk-processing plant but chose New York instead. Even U.S. Steel, which is headquartered in Pennsylvania, has been looking to other states to build new foundries and mills, knowing that such expansion is more affordable elsewhere.
Pennsylvania needs these companies. The plastics industry would like to make this state a manufacturing hub, strengthening other manufacturers from aerospace to electronics. The same goes for energy producers, which fuel Pennsylvania manufacturing and contribute enormously to local economies. Natural gas companies are investing over $10 billion in new plants nationwide, including about $2 billion in Ohio and West Virginia. That money comes with big construction contracts and good-paying jobs once the plants are done. Pennsylvania, however, is getting exactly zero dollars in that kind of new investment, along with zero new jobs.
It doesn’t have to be this way. Research shows that if Pennsylvania reduced its regulatory burdens by roughly a third, our economy would grow by an average of $1,760 per household per year, while manufacturers and other companies would create more than 180,000 new jobs. Instead of streamlining the permitting process and cutting red tape, however, the governor has focused on press conferences and new programs that pick and choose which businesses deserve relief. Shapiro is playing politics instead of revitalizing manufacturing in our state.
Consider the governor’s Fast Track program. It lets him decide which “high-impact” economic development and infrastructure projects to approve – and which ones to kill. Similarly, Shapiro’s “RESET” program directs bureaucrats to streamline permits, but only for energy facilities that provide more than 25 megawatts of power. This isn’t cutting red tape; it’s cutting corners around real reform.
Real reform is only possible if Shapiro is willing to work with Republicans in the legislature. The Regulatory Review Act would force the state to reconsider economically significant regulations – including permitting rules – every three years to ensure they still make sense. The TRAP Act would identify which regulations to repeal or revise, including burdensome permitting rules. There’s also the REINS Act, which would require legislative approval for expensive regulations, likely leading to fewer mandates overall.
The Pennsylvania Senate has passed variations of these bills, only to see them die in the state House, run by Shapiro’s Democratic allies. It would help if the governor threw his weight behind these regulatory reforms. It would also help if he delivered on his promise of a lower corporate income tax. Donald Trump will keep his promise to extend the 2017 federal tax cuts; will Shapiro keep his promise to cut taxes in our state?
The worst thing Shapiro can do is more of the same – picking the winners and losers that suit his political agenda. While Trump is cutting red tape for every job creator, the governor must get serious about relief for all. When he does, manufacturers will flock to Pennsylvania once again.
