Pennsylvania's business community is resilient. We can survive nearly anything, and in the past 24 months proved it. But it helps to know what to expect.
Businesses plan. Maybe not as much as they should; maybe not as far into the future as prudent; but successful companies are not "winging it." Firms plan for sales goals, production schedules, resource needs and hiring. They plan for contingencies and losses. For-profit entities must plan for regulations and taxes.
Certainly, circumstances arise requiring changes to the plans. No matter the best of intent and discipline, plans are not always successfully implemented or goals always obtained.
Much can go wrong in the daily running of a business: Vendors don't deliver on time. Customers cancel orders. Raw material and energy prices increase. Equipment fails. Personnel quit.
With the advent of global markets for virtually all goods and services, political instability and currency risk were added to the list of variables over which managers have no control.
It's particularly galling, however, when the political instability and uncertainty is homegrown.
Congress has spent the last year rewriting rules for a host of industries, and notably for manufacturing, insurance, and banking. The Obama administration is seeking to accomplish through regulation and executive fiat what it cannot achieve through legislation.
Meanwhile, we don't know what will happen to tax policy, with only a little more than four months before the expiration of the Bush tax cuts.
Last year, Pennsylvania's government raised the capital stock and franchise tax rate, and then made the increase retroactive by nine months. That's a recent and extreme, but not uncommon, example of the uncertainty that can be introduced into the business environment by policymakers with a professed desire to protect and create jobs.
Government at all levels must understand that a competitive, job-creating business climate requires as much stability, predictability and certainty as possible. Yes, unexpected circumstances force government to sometimes change direction, too. But among the purposes of government is the absorption and smoothing o frisk.
If we want Pennsylvania to be attractive to employers, then those employers should - at a minimum - be able to expect with certainty:
* That a permit application will be reviewed and acted upon in a timely manner.
* That a law or regulation will be enforced consistently everywhere in the commonwealth.
* That major changes in policy will be announced with sufficient time for planning and accommodation.
* That disputes will be adjudicated fairly in a reasonable time.
* That new regulatory schemes will be risk-based, consistent with national norms, and rely on available technologies.
* That increases in fees and taxes will be implemented on future actions and transactions so they can be factored into decisions and pricing.
* That public resources, such as infrastructure and emergency services, will be provided at adequate levels and maintained at high standards.
Pennsylvania is poised on the cusp of a change of gubernatorial administrations. There is inherent uncertainty, but no excuse for a year of being whipsawed between positions or bludgeoned by random decisions. Most of the machinery of government will continue unabated and unchanged by the election.
It is crucial, however, that our next governor makes certainty a hallmark of his administration and a metric by which he will be judged. National and global events are no excuse for state policymakers - neither the legislature nor the governor - to exacerbate instability already inherent in the business climate.
We know today that Pennsylvania will be confronting some very difficult circumstances: a ballooning budget deficit, skyrocketing pension liabilities, crippling unemployment compensation debt and crumbling infrastructure. These difficulties are the result of a combination of factors and are not the fault of any one political figure or political party. Moreover, finger pointing will solve nothing. These are big problems that will take bold action sustained over a long time.
As policymakers formulate strategies for grappling with these issues, it is absolutely essential the business community have predictability and certainty. In uncertain times, give us some stability. Give us government processes on which we can depend. Allow us to make plans knowing that government is a partner in an effort to expand our firms - thereby increasing job creation and prosperity.
And, if need be, tell us a tax credit will be eliminated or a tax rate will be raised.
Last-minute, spontaneous and -worst of all - retroactive actions will kill any strength our economy gains as the recession ends.
[Sidebar]
Pennsylvania is poised on the cusp of a change of gubernatorial administrations. There is inherent uncertainty, but no excuse for a year of being whipsawed between positions or bludgeoned by random decisions.
[Author Affiliation]
David W. Patti is the president and chief executive officer of the Pennsylvania Business Council in Harrisburg. E-mail him at dpatti@pabusinesscouncil.org.
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