DCED Secretary Concerned over Fund Raiding Effect on Jobs, Economic Development, and Financial Credibility
Harrisburg, PA – In a letter to the Oversight Committee Chairs, Department of Community and Economic Development (DCED) Secretary Dennis Davin outlined his deep concerns with the House Republicans’ plan to transfer committed money away from several funds that will place thousands jobs in peril, halt business development and infrastructure projects already underway, and lead to decreased credibility when the state cannot fulfill commitments it has made to businesses and organizations.
“This proposal removes more than 67 percent of the available fund balance for many important Department of Community and Economic Development programs that impact the lives of residents, the success of businesses, the well-being of communities, and the future of Pennsylvania,” Secretary Davin wrote. “Overall, these programs represent the continued growth of our commonwealth.”
In the letter, Secretary Davin outlined several ways that the cuts to these program funds would have devastating consequences to the business community, including:
- Depleting funds to programs in the Pennsylvania Industrial Development Authority (PIDA), resulting in denying already-committed growth capital to businesses at a time when private interest rates are rising and federal regulations on private lenders make it difficult for small business to secure the money they need to expand and modernize. The proposed removal of $51 million from these programs could prevent the creation of as many as 1,020 jobs.
- Raiding the Ben Franklin Technology Development Authority (BFTDA) Venture Capital Fund, detrimentally impacting the availability of funding for hundreds of technology companies now gaining momentum across Pennsylvania and seeking new capital investment as startups or for expansion. Those loans enabled the commonwealth’s venture sponsors to raise more than $600 million in private investor dollars since 2002, which in turn spawned investment into 145 Pennsylvania-based companies, creating more than 3,000 jobs.
- Removing funding for the Municipal Financial Recovery Act (Act 47) Revolving Aid Fund, severely harming distressed municipalities – such as Hazleton, which just recently entered the program – that count on Act 47 for badly needed fiscal relief. Without this funding, cities would have a much more difficult time exiting Act 47. Seventeen municipalities, including Pittsburgh, Scranton, Johnstown, Reading, New Castle and Franklin, remain distressed under Act 47.
- Stripping away funds from the Industrial Sites Cleanup Fund and the Industrial Sites Environmental Assessment Fund, halting progress for the development of brownfield sites that provide homes for new businesses close to population centers. The proposed raid of these funds threatens many important projects, including:
- The Three Crossings Riverfront West, a $210 million mixed-use redevelopment project in Pittsburgh;
- The redevelopment of the former K&M Co. manufacturing site for residential use in Ambler, Montgomery County;
- The redevelopment of a former manufacturing site for retail space in Wilkes-Barre; and
- The conversion of the former Tyco industrial site on a main street in Carlisle for use by a health care company.
- Transferring funds dedicated to multimodal projects through the Commonwealth Financing Authority (CFA) that provides funding for critical infrastructure projects such as:
- East Allen Twp., Northampton County, site work and infrastructure improvements on LHV Airport Road near Route 329 to help accommodate a warehouse development;
- City of Allentown, Lehigh County, Center City Street Lights and ADA Ramp Installation;
- Mitigation of unsafe conditions on the heavily used Chestnut Street corridor in Harrisburg;
- Improvements to dangerous pedestrian conditions in the S. Duke Street corridor in Lancaster;
- The Wyoming Street streetscape plan in Hazleton;
- The Butler County Airport Authority runway expansion;
- And future projects under consideration.
A copy of the letter to legislators can be found here.
Michael Gerber, DCED, 717.783.1132