Gov. Josh Shapiro, who frequently heralds the Lehigh Valley as a model for economic development, selected Bethlehem as the location to explain how the new state budget will make Pennsylvania more attractive for business and spur job creation. 

The $47.6 billion budget signed on July 11 increases spending on economic development by more than $500 million, while also lowering corporate taxes, reforming the tax code, and expediting permitting.

During a ceremonial signing of a bill on July 16 to create the PA SITES program that will invest in making sites shovel ready for development, held in front of a former Bethlehem Steel office building, Shapiro said the bipartisan effort will get sites primed for investment and position Pennsylvania to be more competitive when it comes to economic development.

“Everybody understands the important role that economic development plays in creating a safer, healthier environment where more people can put food on the table and provide for their families.” Shapiro said. “That's what real freedom looks like, and that's what real opportunity is all about. You're doing it here in the Lehigh Valley.”

After signing the bill, Shapiro presented it to Don Cunningham, President and CEO of the Lehigh Valley Economic Development Corporation (LVEDC).

Cunningham has worked closely with the Shapiro Administration on economic development issues and was appointed to the PA Workforce Development Board.

Shapiro has made several stops in the Lehigh Valley since taking office, including this past January when he unveiled the state’s first long-term statewide economic development strategy in decades.

Pennsylvania’s fiscal year 2024-25 budget finances the implementation of critical parts of the state’s new strategy, including $500 million making sites shovel ready. The $400 million PA SITES program provides grants for infrastructure, utility, and other improvements. In May, an industrial site in Allentown was announced by Shapiro as the first recipient for a grant from a trial run of that program, allowing for construction of a manufacturing facility that could employ 30 to 50 people.

“This is a big investment. It's bold and most of all, it's what's needed for our communities and regions of Pennsylvania,” said Rick Siger, Secretary of the Pennsylvania Department of Community and Economic Development.

Jay Garner, an Atlanta-based site selection consultant who had offered Shapiro’s administration feedback on Pennsylvania’s competitive position last year, lauded the PA SITES program.

“What impressed me was the Governor and his team listened. They acted, and now they are implementing,” said Garner, who wrote the book Economic Development is [Still] Not for Amateurs. “We look at locations all over the globe, and I happen to think that the Lehigh Valley is the shining star for economic development in the Commonwealth of Pennsylvania.”

Cunningham called the PA SITES program a “welcome tool” to grow the economy. Some challenging sites require public-private partnerships to make them more competitive and create jobs and a tax base, he said.

“That’s what the PA SITES program can do: take places like this that are old, legacy buildings that can be reused,” Cunningham said.

Shapiro made the announcement in front of what was once called the Steel General Office building, once the headquarters of Bethlehem Steel. The building has sat vacant for decades as the former Steel land around it was redeveloped into the SteelStacks entertainment campus featuring the ArtsQuest Center, PBS Public Media Center, and Hoover-Mason elevated trail which wraps around stages and plazas just west of the Wind Creek casino.

The SGO building is part of a larger 400,000-square-foot complex. Thanks to a mix of state and federal grants, Peron Development has begun the remediation of 125,000 square feet, described as the East Annex portion. The East Annex is planned to become offices for up to 600 employees.

John Callahan, Peron’s Director of Business Development, said programs like PA SITES have the potential to help challenging projects like redeveloping the SGO building.

Bethlehem Mayor J. William Reynolds said after the signing ceremony that the new program is “huge for Pennsylvania.”

“The sky is really the limit for what this is going to mean for our families, for jobs, and for economic opportunity in Bethlehem, the Lehigh Valley, and Pennsylvania,” Reynolds said.

Also speaking at the event were state Sen. Nick Miller, state Sen. Lisa Boscola, and state Rep. Steve Samuelson. Northampton County Executive Lamont McClure was among the local, state, federal, and business officials who attended Shapiro’s bill signing.

"This funding could be critical for the redevelopment of the SGO, and the SGO is exactly the kind of redevelopment that we need in Northampton County," McClure said.

The budget, negotiated by Shapiro and the state Legislature, also includes:

• $20 million for the Main Street Matters program that supports small businesses and commercial corridors that are the backbone of communities across the Lehigh Valley and Pennsylvania.
• $20 million for the Historically Disadvantaged Business Program that supports small minority-, women-, and veteran-owned businesses.
• $15 million for tourism marketing to boost the economy by attracting more visitors and supporting good-paying jobs.
• $30 million increase in funding for Career and Technical Education programming and equipment.

The budget continues the gradual decrease of Pennsylvania’s corporate net income tax rate. In 2025, it will fall to 7.99%. The rate is being reduced annually, until it reaches 4.99% in 2031.

It also reforms Pennsylvania’s rules for carrying over net operating losses. While federal law permits deductions at 80% of taxable income, Pennsylvania capped operating loss carryovers at only 40%. That will be increased by 10% annually until it reaches the federal threshold.

The budget includes $10 million to assist in the redevelopment of malls and other commercial properties into mixed-use commercial and residential uses.

And it creates a new expedited permitting program in the Department of Environmental Protection. Applicants can pay for an expedited review of certain air, water, and land disturbance permits, to be done by a third-party expert.