Pennsylvania’s governor to push for millions in funds for economic development in budget

Democratic Gov. Josh Shapiro wants to devote millions of dollars to creating a 10-year economic development plan, including developing commercial and industrial sites, revitalizing an aging workforce and better competing with neighboring states to entice big businesses to choose Pennsylvania.

The plan, which Shapiro announced a week out from his formal budget address, seeks to address workforce shortages, ease challenges for startups and tech spinoffs and boost funding for economic development incentives.

Shapiro’s administration will focus its funding in five industries: agriculture, energy, life sciences, manufacturing and robotics and technology.

“These industries are the legs of our economy’s stool. I know stools have four legs. This is going to be a really firm stool,” he joked at a press conference announcing the proposed investments on Tuesday. “It’s going to hold everything up. We’ve got a fifth leg.”

Shapiro has been eyeing such a strategy since last year, when he told legislators during his inaugural budget address that he was “competitive as hell — and I’m sick and tired of losing to other states.”

The announcement comes as neighboring states are pouring incentives into luring multibillion-dollar microchip, electric vehicle and battery factories. That includes Ohio landing a $20 billion factory by chipmaker Intel in 2022, which officials say has the power to create a new technology hub in the state.

But business-sector officials say Pennsylvania lacks huge tracts of available land to attract such projects.

Shapiro said while a group of site selectors found Pennsylvania appealing, they told his administration it’s “nearly impossible to sell a company on the Commonwealth because we don’t have sites ready to go.”

“Other states literally have pads shovel-ready. Permits are done. Electrical hook-ups are already good to go,” he said. “Well, it’s time that we in Pennsylvania catch up to those other states. We need to catch up now because it takes years to develop these kinds of sites.”

Shapiro has worked to shorten the wait time to receive licenses and permits, and he has touted Pennsylvania’s role in being awarded federal funding to establish two hydrogen hubs in the state as part of President Joe Biden’s effort to fight climate change.

But challenges still abound. Even though Pennsylvania’s payrolls hit a record high in December, the state’s labor force has lagged behind pre-pandemic levels. The state’s economy is less dynamic than some other states and its workforce is relatively older and slower-growing.

Shapiro has warned that being competitive would take money, and he plans to ask lawmakers for millions to kick start the plan.

A “major investment” would go to site development, building on a pilot program that provided grant funding to do site assessments and prepare land for remediation as a sweetener to commercial and industrial businesses.

For small businesses and commercial corridors, Shapiro is proposing $25 million. Another $3.5 million will create the new Pennsylvania Regional Challenge, which is aimed at incentivizing regional growth. To further develop the workforce and create more internships as a way to keep people in the state, he is asking for $2 million.

Other funds will support start-ups and entrepreneurs, with $10 million set aside for the agricultural industry.