Pennsylvania heads into the new year with a budget that continues the state’s increased commitment to creating jobs and growing the economy, a strategy that has paid off with Pennsylvania recently being named as the top business climate in the Northeast, and the only growing economy in the Northeast. 
The budget, a bipartisan negotiation of Gov. Josh Shapiro and state legislators that was approved in November, increases funding for key programs while also streamlining permitting processes to deliver projects sooner.
It also decreases the state’s corporate net income tax rate, to 7.49%. That rate is scheduled for reduction each year until reaching 4.88% in 2031 and then will be among the lowest in the nation.
“This budget continues Pennsylvania’s economic rise, cutting taxes for our businesses and investing in sites, in innovation, and in the main streets that form the beating heart of so many communities,” Shapiro said.
The new budget continues one of the cornerstones of Pennsylvania’s economic development strategy, to make key sites shovel ready through the PA SITES program. That initiative will invest $500 million over several years to expand the number of business-ready sites. To date, $113 million has been awarded.
The Lehigh Valley received the first PA SITES grant in 2024, $1.1 million to extend utilities to a property in Allentown where an industrial building suitable for manufacturing is planned.
The budget also includes:
- Increased funding for two of the state’s key economic development program, with an additional $8.9 million for the BusinessPA program and an additional $1.3 million for “Marketing to Attract Business” efforts.
- $38 million for Pennsylvania First, the Commonwealth’s lead, flexible economic development incentive program.
- $20 million for Main Street Matters, which supports small business corridors.
- $183 million for career and technical education and apprenticeships.
A significant impact from the new budget on economic development will be in permitting reforms.
Some environmental permits will now be “deemed approved” if the state does not meet deadlines to act on them. And legislation was passed with the budget that expands the Streamlining Permits for Economic Expansion and Development (SPEED) program of the Department of Environmental Protection.
Created last year, the program expedites environmental permitting decisions by allowing applicants to have a DEP-verified and qualified private professional conduct the initial application review. DEP staff then review the professional’s recommendations and issue a final decision or identify technical deficiencies to the applicant. DEP has final authority over all permit decisions.
In November, Site Selection magazine published its annual ranking of state business climates. Pennsylvania was ranked as the top state in the Northeast and 11th overall, rising seven spots from last year.
That followed an analysis by Moody’s Analytics that showed Pennsylvania is the only state in the Northeast with a growing economy, as of October.
(Photo by Rick Kintzel)