LVEDC Advocates for Economic Development Program Funding
By LVEDC Staff on August 19, 2014
The Lehigh Valley has been one of the fastest-growing growing regions in the Commonwealth of Pennsylvania and some of the reason for that has been the strong support of the state through economic incentive programs.
That’s why the region’s economic development agency is distributing a letter this week that urges legislators in the Pennsylvania House of Representatives and Senate to reinstate adequate funding levels for the Commonwealth’s business attraction and retention efforts.
In an effort to produce a budget last month, lawmakers balanced their ledger thanks in part by pulling $85 million from the Machine Equipment Loan Fund (MELF) and $95 million from the Small Business First Fund (SBF). The problem is that both of these programs have served as vital economic development incentives for projects that have helped to create nearly 5,000 jobs in the Lehigh Valley during the last three years.
“The Northeastern United States is an extremely competitive economic development market,” said Don Cunningham, president and CEO of LVEDC. “New York and New Jersey have both gotten very aggressive in attracting and growing businesses. The Lehigh Valley is at the front lines of that competition on behalf of Pennsylvania and these incentive programs have been a vital part of our success.”
The programs have played an integral role in the Lehigh Valley’s economic development efforts. During the past three years alone, more than $24 million in low-interest loans were offered to 14 current or existing companies to acquire new machinery or to update their equipment. Thanks in part to these loans, these companies authored their own stimulus package, investing about $226 million in the Lehigh Valley, retaining more than 4,900 jobs and creating another 1,900 in the process.
“Without the programs mentioned above, companies will find less reason to locate and do business in our state and o send the signal that Pennsylvania is closed for business,” Cunningham writes in the letter.
By pulling out the $85 million, the MELF fund is now left with less than $15 million. The depleted funding has in essence closed the fund to new applications and has negatively impacted applications that were previously submitted and determined to be viable projects.
“The raiding of this program’s fund balance has rendered us unable to provide the kind of assistance our manufacturing community needs to flourish,” said John Kingsley, LVEDC vice president of finance.
One company LVEDC is currently working with vividly indicates the argument. A manufacturing company with a renowned Lehigh Valley legacy recently submitted a $750,000 MELF application to assist in updating their manufacturing line. The comprehensive redevelopment of the company’s production process is not only expected to enhance their technology and virtually make all but certain their industrial activity in our region will continue. And with that continuing, so will the jobs the company provides for Lehigh Valley residents, and the additional employment that will be created to support the company’s growth.
“We really believe that it is projects like this one that MELF and many of the related Pennsylvania economic development programs were created to support,” Kingsley noted.
And while LVEDC is aware tough economic times in the Commonwealth’s budget require sacrifice, without question Cunningham believes this isn’t the way to do it.
“Allocations through Pennsylvania grants have helped enable vital projects to come to the Lehigh Valley, from companies including Kraft Foods Group, Ocean Spray Cranberries, and Westport Axle,” Cunningham wrote. “Pennsylvania competed nationally to successfully land these projects, in the process of creating or saving more than 1,700 jobs.”
And LVEDC wants to make a compelling argument to legislators to see this decision reversed, for the sake of the Lehigh Valley’s economy.
Embed the LVEDC Video Nominated for an Emmy Award
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