Department of Community and Economic Secretary C. Alan Walker testified Wednesday before the House Appropriations Committee and fielded questions from committee members during 2014-15 fiscal budget hearings.
Committee Chair William F Adolph, Jr., R-Delaware, kicked off the meeting by thanking the Secretary for the department’s work to save three refineries in his district in 2012. (Team Pennsylvania Foundation provided support to the Governor’s Action Team (GAT) to keep the refineries open.)
“More than 2,000 direct jobs were saved and another 36,000 indirect jobs were retained due to the administration’s actions,” Adolph said. “By saving those three refineries, you saved the economy of Southeast Pennsylvania.”
As part of his testimony, Walker highlighted for committee members Gov. Tom Corbett’s three core priorities to build a stronger Pennsylvania.
“Those priorities are effective public schools to educate the next generation of thinkers and innovators, a private sector where businesses, large and small, can grow and hire, and a health care system where Pennsylvanians have choices,” Walker said. “At DCED, we’ve streamlined economic development programs to focus resources on initiatives that provide the strongest return-on-investment, both in private funds leveraged and jobs created and retained.”
Those actions, Walker noted, have allowed DCED to help create and retain over 150,000 jobs last fiscal year.
Walker added that the governor’s launched in 2012 Jobs 1st PA, which is an economic recovery program that harnesses the state’s resources and talents to prioritize private-sector job creation and retention.
“The governor’s policies have spurred investment in Pennsylvania’s future. Fiscal stability, an improved business climate and a growing abundance of low-cost, domestically produced energy has our economy growing,” Walker told the committee. “Pennsylvania is now a $600 billion economy and is the sixth largest economy in the United States.”
Walker said GAT is seeing its highest level of activity since before the recession with 102 successful projects last year, up from 79 successful projects the previous year. Some of the key GAT projects highlighted by Walker included Bell and Evans (380 jobs in Lebanon County); Nordstrom (369 in Lancaster County); and Computer Sciences Corporation, which will create 500 new technology jobs over the next three years in Pittsburgh’s Strip District.
Internationally, Pennsylvania has seen economic growth as well, according to Walker.
“Pennsylvania exports grew by 5.4 percent from $37.8 billion in 2012 to nearly $41 billion in 2013,” Walker said. “Pennsylvania was also one of only three states in 2012 that positive growth in foreign direct investment and ranked fourth among the 50 states for total number of insourced jobs.”
Concerning the 2014-15 budget, Walker highlighted the governor’s proposal to:
- Continue to level fund Discovered in PA, Developed in PA, which supports initiatives tied to the life sciences, advanced manufacturing, business incubators, and education, workforce and economic opportunity collaborations.
- Increasing by $500,000, or 4.2 percent, the Partnerships for Regional Economic Performance (PREP), a statewide network of local partners that deliver assistance to job creators across 10 regions of the state.
- Increasing by $604,000, or 8.3 percent, support for the World Trade PA program, which is entirely performance-based with a very high ROI – 157:1. Last year, the program generated nearly $100 million in tax revenue.
- Providing an additional $2 million to the WEDnetPA program, enabling Pennsylvania employers to train an additional 10,000 workers.
- To level fund the state’s Early Intervention program as part of Act 47, which is designed to assist financially distressed communities. Early intervention seeks to identify and assist communities before their finances reach crisis mode.
Following his testimony, Walker answered questions related to his department’s budget proposal.
Walker was asked whether there was less money in last year’s budget for distressed communities as part of Act 47 because there are fewer communities needing assistance.
“Thanks to the early intervention program that was implemented several years ago, we know if a community is headed toward Act 47 status,” Walker said. “That is the last thing we want to have happen because it is very expensive for the state. Right now, we have 21 communities in Act 47. Our early intervention and warning system is working very well, so I don’t expect as many (municipalities) to go into the program in the future.”
Walker was asked why the state funds a program like Discovered in PA when it has other well-established and successful programs like Ben Franklin Technology Partners and Innovation Works. He said Discovered in PA differs from those initiatives, noting it provides additional flexibility to assist innovative ideas that promote entrepreneurship, technology transfer, business outreach, and increased capacity.
On other matters pertaining to job growth and economic development, Walker said he did not have a timetable as to when Royal Dutch Shell might commit to building an ethane cracker plant in Beaver County.
“I am very optimistic about it happening,” Walker said. “You have to understand that Royal Dutch Shell is a very deliberate company – they are really studying this process. This is a multi-million investment by Dutch Shell, so they are doing due diligence, and they have been non-committal because this is on their timeline, not ours.”
Walker was asked the jobs impact if the company decides to build in Western PA.
“During construction a minimum of 10,000; jobs at the plant will range between 400 and 500,” Walker said. “The real impact, however, are with those downstream companies who will make the plastics – and expect significant job growth there.”
Walker is also slated to testify before the Senate Appropriations Committee.