Gov. Josh Shapiro’s $44.4 billion budget proposal contains key investments he said would strengthen Pennsylvania’s workforce and its manufacturing sector, making “a significant down payment on innovation and economic development.”

Talent – a key driver of business location decisions – would be fortified through new and expanded jobs programs, under the proposal. Funding for Pennsylvania’s lead program for job creation and retention – Pennsylvania First – would rise by 65% to $33 million. A new $3 million jobs initiative, Foundations in Industry, would develop the workforce with an increase in the number of apprenticeships and pre-apprenticeships across Pennsylvania.

In a push to adopt new technologies, Manufacturing Innovation Program, would get a $1 million bump, allowing for 14 more manufacturers to partner with universities, state agencies and other institutions to advance new products and processes.

The governor also proposed a $2.9 million initiative supporting major economic development projects through the newly created Office of Transformation and Opportunity, which he established during his first week in office as a one-stop shop to help businesses cut through red tape.  

“The next time a company like Intel looks to build a semiconductor factory in the United States, they should be looking at Pennsylvania,” Shapiro said in his budget address March 7 before a joint session of the General Assembly in Harrisburg. “Whether folks in this room like me or not, the one thing I hope you can all agree on is that I’m competitive as hell – and I’m sick and tired of losing out to other states.”

Shapiro’s proposal, which now faces the scrutiny of the state Legislature, would be an 8% increase over last year’s budget. The increase would be mainly driven by education and health care spending, but the proposal also contains important investments in economic development and maintains a tax policy aimed at making the state a friendlier place to do business.

The budget would continue reducing the Corporate Net Income Tax per a state law signed last year. Pennsylvania, which had the nation’s second highest tax rate last year, was reduced Jan. 1 from 9.99% to 8.99% and will decrease a 0.5% each year until it reaches 4.99% in 2031.

The CNI reduction, workforce initiatives and support for manufacturing growth complement Lehigh Valley Economic Development Corporation’s strategies to strengthen the regional economy. Manufacturing is the biggest part of the Lehigh Valley’s economy and its $8.4 billion output ranks among the top 15% in the nation. The LVEDC’s Talent Initiatives have been recognized among the best in the country.

“A new day has dawned for economic development in Pennsylvania,” said Don Cunningham, LVEDC President and CEO. “The new governor has shown an impressive level of personal commitment to economic development, job creation, and driving change in state government.”

Shapiro specifically called out the Lehigh Valley in his budget address when introducing his proposal to recapitalize Historically Disadvantaged Business grants program with a $20 million investment. He noted that Allentown is “on the rise” because Mayor Matt Tuerk is “building bridges, welcoming folks into his community, growing the economy and making sure government works for everyone.”

“Latino families moving to Allentown are helping create vibrancy and excitement in the Lehigh Valley. They chose Pennsylvania,” Shapiro said. “Now we can help them succeed and boost the local economy.”

Underscoring his commitment to economic development, Shapiro will speak March 21 at LVEDC’s Annual Meeting in Bethlehem. The Lehigh Valley is among the state’s fastest growing regions, in terms of both population and job growth. The two-county area has added 13,000 jobs over the last five years and is a national leader in business attraction and expansion. The Lehigh Valley produced a record $47 billion Gross Domestic Product in 2021.

Here are some economic development highlights from the Governor’s budget proposal:

• Dedicates more than $3.3 million in new funding to ensure educational facilities and schools with Career and Technical Education programs can purchase and upgrade technology and equipment.
• Invests an additional $4 million in career and technical centers to support employment and expand program offerings in high-demand areas of health care, STEM, energy, and infrastructure trades.
• Proposes another $5 million in secondary career and technical education for increasing computer science and STEM programs statewide.
• Provides $2 million to establish a state-level Industry in the School Program that will allow for industry professionals to teach and build interest among students within the classroom.
• Increases the states Apprenticeship Training program by $3 million to strengthen the Commonwealth’s commitment to an earn-and-learn model that will lead to family-sustaining wages.
• Creates a new PA Schools-to-Work program by investing $3.5 million to support workforce development partnerships between schools, employers, organizations, and associations which will create robust employment and training pathways.
• Invests $3 million in the creation of the Foundations in Industry program to cover costs related to in classroom instruction that complements on-the-job learning with Registered Apprenticeships and Pre-apprenticeship programs.
• Proposes $24.7 million in job retention and recruitment efforts to attracts individuals into certified and licensed professions such as in the fields of nursing, education, and policing through a refundable tax credit of up to $2,500 per year for three years.
• Promotes teacher professional development opportunities by investing $2 million through local education agencies.
• Increases funding by $12 million for the Pennsylvania First Program, $2 million of which is for the WEDnetPA program, to provide flexible financial assistance and train more incumbent workers to leverage and maximize the return on private investments to attract new businesses and remain competitive in the marketplace.
• Proposes to invest $20 million in historically disadvantaged businesses that were affected by the pandemic for the purpose of leveraging capital needed to expand or sustain business operations.
• Includes a $1 million investment in the Pennsylvania Council on the Arts to expand financial assistance opportunities to enhance and drive retention and attraction of residents, talent, and visitors.