Small businesses are struggling — that’s no secret to anyone.
On Wednesday, business owners from across the state testified before the state House Majority Policy Committee in Harrisburg that they fear Gov. Tom Wolf’s proposed budget will be the proverbial straw that breaks the camel’s back.
“They are being attacked from all sides,” said state Rep. Marty Causer, R-Turtlepoint, who chairs the committee. “They’ve been dealing with a pandemic, with executive orders that have shut them down or reduced their business, the overall pandemic” that has fewer people frequenting businesses.
“Then on top of that, they have a proposal to increase the personal income tax, increased minimum wage, increased energy tax,” Causer said, explaining the proposals in Wolf’s budget.
At the hearing, these business owners were “looking at us with a sense of bewilderment.”
Causer said Guy Berkebile, president of Guy Chemical Company Inc. in Somerset, pointed to the 2017 federal Tax Cuts and Jobs Act to illustrate the value of tax cuts — rather than tax increases — in building the economy. He explained that he took the savings achieved under that law to invest in new equipment, build a larger lab, provide a higher salary and bonuses to employees, and create additional jobs.
“All the good that came to the American economy and the growth and expansion of industry that we have seen because of the lowering of tax rates at the federal level is challenged by Gov. Wolf’s proposal,” Berkebile said.
Causer told The Era, “It’s the wrong direction. We need to focus on recovering from the pandemic.”
The legislator said he’s heard from many local businesses, too, concerned not only with the tax increase, but also with a proposal to increase the minimum wage to $12 in July and to $15 by 2027, and to eliminate the tipped wage.
Sam Denisco of the Pennsylvania Chamber of Business and Industry testified at the hearing. He pointed to a recent report by the nonpartisan Congressional Budget Office that indicates a minimum wage increase to $15 an hour would lead to the loss of 1.4 million jobs nationwide, around 500,000 more than the number of people they project will be helped out of poverty. A Pennsylvania-specific study conducted last session by the Independent Fiscal Office found that an increase to $12 could lead to the loss of 34,000 jobs across the Commonwealth.
“This mirrors much of the feedback we have received from our members – who have said this type of cost mandate would force them to make very hard decisions regarding reducing hours and/or eliminating positions, increasing the prices for goods and services, and/or curtailing any possible expansions,” Denisco said.
“You’ve got to look at the whole picture,” Causer told The Era Wednesday evening. “The only way we grow is to get people back to work.
“In many cases, these people being taxed are on the edge,” he said, explaining one testifier said he laid off all of his employees because of the pandemic and the executive orders. He’s been paying for the employees’ health insurance out of his own pocket in hopes he can afford to bring them back to work soon.
“I think hearing from these small businesses directly is very impactful and that’s why we’re taking the testimony from people,” Causer said. “The governor needs to listen also.
“I think it’s important for legislators to hear from the people running these businesses,” he added. “I’ve always thought the best thing a legislator can do is listen.”
In a prepared statement, Causer said, “The budget proposed by the governor is really out of touch with the reality facing business owners in all sectors across the state. Increasing taxes and artificially inflating wages — on top of the revenue losses caused by COVID-19 mitigation efforts — would significantly increase the cost of doing business in the Commonwealth and the end result would be the loss of thousands of jobs.
“There is absolutely no question we need to enact a budget that is supportive of the people who employ our citizens and make our economy go, rather than the governor’s plan, which does nothing more than kick our employers while they’re down,” he added.