Eli Lilly and Company’s historic $3.5 billion investment in the Lehigh Valley was highlighted by Gov. Josh Shapiro during his budget address as evidence that Pennsylvania’s economic development strategy is working, and should be expanded.

The investment is the largest ever in the Lehigh Valley and the largest life sciences project ever in Pennsylvania. 

“We couldn’t even compete for that kind of deal a few years ago — but now we’re winning them,” Shapiro said during his address on Feb. 3. “Because we have a plan, we have the resources to back it up, and we are moving with real speed.”

Lehigh Valley competed with 300 other regions for Lilly, part of the company’s $50 billion national expansion of its manufacturing network.

Don Cunningham, President & CEO of Lehigh Valley Economic Development Corporation (LVEDC), was among the guests invited by the Governor to attend the budget address at the state Capitol in Harrisburg.

LVEDC played a leading role in Lilly’s competitive site selection process, coordinating with state officials and convening local and regional partners to put together a plan to meet the company’s infrastructure, utility, and workforce needs and ensure that the project can be completed on time.

Lilly plans to break ground later this year on the manufacturing campus, which will create 850 jobs along with 2,000 construction jobs. Located in Upper Macungie Township, the center will produce weight-loss medicines and total 925,000 square feet over multiple buildings.

In his budget proposal, which would require approval by the state Legislature, Shapiro suggests expanding access to a tax credit program that was a key economic development incentive that was part of the $100 million in state investment in the Lilly project.

Half of that investment will come from the PA EDGE program. Lilly is the first company to qualify for that credit, which was created in 2022 and requires investment of at least $200 million and the creation of at least 800 jobs to qualify.

“Lilly's investment here is proof that PA EDGE is a powerful incentive for economic development,” Shapiro said at the Lilly announcement in the Lehigh Valley, held Jan. 30 at Da Vinci Science Center in Allentown.

Shapiro is proposing to reshape parts of the program, making it easier for businesses to participate. If approved, new criteria would reduce the size of the projects that would qualify, to an investment of $150 million and 100 new jobs. 

Shapiro said initiatives started by his administration in the past three years – to expedite permitting, reduce taxes, and improve workforce training opportunities – are paying off.

“We now have the only state economy in the Northeast that’s actually growing, according to Moody’s. And Forbes rated us one of the best states in the country to start a business,” Shapiro said. “The investments we’ve made are paying off — our economy is growing and in the first seven months of this fiscal year, we’ve collected $417 million more in revenue than estimated.” 

At the Lilly announcement, Cunningham said Shapiro and his administration’s programs are delivering results for the Lehigh Valley and Pennsylvania.  

“Thank you for your leadership, for your understanding of what it takes to grow a state's economy, for the hard work, the smart investment and the attention to detail that it takes to compete and win high-value companies,” Cunningham said.

Shapiro's proposed budget would continue the incremental reduction of the state’s corporate net income tax, by 0.5%, until it reaches 4.99% in 2031, when it would be one of the lowest in the nation.

It proposes adding $18 million more in funding for career and technical education, to a total of $200 million, and to increase scheduling flexibility for students.

“Let’s give more students that opportunity,” Shapiro said. “The way for Pennsylvania to continue to be competitive is to provide the skills and the training we need right now.”

Other budget proposals include:

• Creating the AdvancePA tax credit, a new $10 million tax credit to provide more flexibility for securing important deals and incentivizing high-paying job creation. 
• An additional $10 million for the PA First Program, which connects businesses with trained workers and supports job retention and capital investments, for a total of $38 million.
• Creating a $100 million program, funded through insurance premium tax credits, to invest in life sciences, manufacturing, robotics, technology, energy, and agriculture. The program would expand venture capital access, strengthen leadership pipelines in life sciences and biotech, support clinical trials, commercialize university research, and seed regional venture studios.
• Increasing agricultural innovation grants by $9 million, bringing total funding to $19 million.
• Doubling funding, to $7 million, for the Schools-to-Work pathways program that bridges the gap between school and employment.
• Creating a dedicated appropriation for WEDnetPA of $12.5 million to train more than 1.3 million workers, giving Pennsylvania companies the skilled workforce they need to grow and compete.
• Allocating $2 million for the new Career Connect Program to expand internship opportunities.

His proposed budget also would increase funding or programs to address needs in housing, public transportation, public education, higher education, energy creation, public safety, public health, childcare, and other priorities that strengthen communities and quality of life.

Read the Governor’s prepared remarks here and a summary of the proposed budget here.

(Photo by Donna Fisher Photography)