LVEDC, State Officials Participate in Economic Development Symposium
By Colin McEvoy on May 1, 2015
Representatives from the Lehigh Valley Economic Development Corporation (LVEDC) and the Pennsylvania Department of Community and Economic Development (DCED) were among the participants at an economic development forum this week.
The law firm of Norris McLaughlin & Marcus hosted its 3rd Annual Economic Development Symposium at the Renaissance Allentown Hotel on April 30. It included a discussion about the Gov. Tom Wolf’s proposed budget, and an overview of the Lehigh Valley economy presented by LVEDC President and CEO Don Cunningham.
Scott Dunkelberger, executive director of DCED’s Center for Business Financing, discussed the community and economic development portions of Wolf’s $33.8 billion budget proposal, which would cut Pennsylvania’s corporate nearly in half, and introduce a new $675 million bond program to support investments in infrastructure, energy and technology.
“The DCED budget has taken a pretty big hit over the last few years, and it’s significantly impacted our ability to do our job, to be honest with you,” he said. “So when the governor came into office and said, ‘You’re going to need more here and more here and more here,’ it was a different attitude than we’ve seen before.”
Dunkelberger noted the budget calls for a $25 million appropriation increase for Pennsylvania First, a grant program that fosters investment and job creation. The program, which was previously cut from $45 million to $20 million, has leveraged $41-to-$9 private-to-public dollars, with an actual cost per job for program at about $2,400 per job, he said.
The governor is also seeking an $11 million increase for the Infrastructure and Facilities Improvement (IFIP) program, which provides multi-year financial assistance to service debt on major infrastructure and facilities projects. Dunkelberger said the funding increase will support about 20 new projects.
The $675 million bond program calls for $100 million to the Pennsylvania Investment Development Authority for business development loans; $225 million in energy investment; $110 million in technology investments; and $250 million to the Business in Our Sites program, which helps Pennsylvania to compete for business expansions and relocations.
“These would be bond-funded programs, and the debt service on the bonds would be paid on procedes from a severance tax” on natural gas, Dunkelberger said. “But we don’t have one right now, so that will have to fall into place first.”
Dunkelberger noted the first project approved in the Business in our Sites program, which was established in 2004, was the Bethlehem Commerce Center. That $15 million project was approved during the administration of Gov. Ed Rendell, and Dunkelberger said it has helped kick-start additional surrounding development in Bethlehem.
During his presentation, Cunningham said the Lehigh Valley’s GDP has risen to $34.3 billion, which is larger than that of the state of Vermont and 102 other countries. He also said the biggest four sectors that make up the regional GDP all fall within $350 million of each other, revealing a very diverse and multi-faceted economy.
“The way the economic output breaks down is very nicely balanced,” he said. “And one thing that’s significant is manufacturing is our second largest sector of the economy by economic output.”
The Lehigh Valley has been ranked by Site Selection magazine as the top-performing region in the Northeastern United States relative to its size, Cunningham said. It is one of only two regions to make Site Selection’s top 10 best-performing metropolitan areas for seven consecutive years, along with Dayton, Ohio.
Cunningham also discussed an ongoing wide study of the region’s supply of trained workers and workforce demand. LVEDC and the Lehigh Valley Workforce Investment Board have commissioned Oxford Economics of New York City to study the skills and training gaps and strengths of the current Lehigh Valley workforce. Those findings will inform a newly-forming Education and Talent Supply Council, comprised of representatives of Lehigh Valley educational institutions to engage education in economic development.
“Coordinating a prepared workforce is probably the biggest issue going forward, particularly as we grow on both the supply side and demand side,” Cunningham said. “We need to understand what type of jobs do we need, and what type of jobs our community colleges, four-year schools, for-profit schools and our vo-tech schools are putting out.”
John Lushis Jr. and Graham Simmons, both from Norris McLauighlin & Marcus’ economic development law group, also spoke during the symposium. Lushis discussed tax increment financing, and Simmons gave a presentation about economic development in practice.
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