Remarks prepared for delivery on Thursday, November 13, 2014.
Testimony of Greater Philadelphia Chamber of Commerce President & CEO Rob Wonderling on City Council Resolution 140869
November 13, 2014
Good afternoon Council President Clarke and members of City Council’s Committee of the Whole. I am Rob Wonderling, President and CEO of the Greater Philadelphia Chamber of Commerce (GPCC). Thank you for the opportunity to testify today on Resolution 140869, which authorizes the Committee of the Whole to hold hearings to fully explore opportunities to further establish the Philadelphia region as an energy hub.
As City Council begins considering how best to help in positioning Philadelphia and the region as an energy hub city, it may be worth first considering several key economic indicators.
The first indicator is 1.3 percent. That is how much total annual average employment declined in Pennsylvania between 2007 and 2012, according to the Bureau of Labor Statistics.
The second indicator: 259.3 percent. That is how much employment in the oil and natural gas industries increased in Pennsylvania over the same time period. That means 15,114 new jobs.
While the majority of this job growth occurred in the Marcellus shale region in southwestern Pennsylvania, the American Petroleum Institute reports that total jobs supported by the oil and gas industry throughout Pennsylvania reached 102,668 in 2012 - and are expected to rise to over 220,000 jobs by 2020.
And here is one last key indicator: 8 out of 10. Eight of the 10 major industry sectors in Philadelphia lost jobs over the past decade, part of a decades-long trend that saw Philadelphia lose hundreds of thousands of jobs as our economy transitioned from one based on manufacturing to one based more today on higher education, health care, leisure, tourism and hospitality, and a more service-oriented economy.
The question before us today is: How can the business community work with City Council, the Mayor’s Office and city government to reverse these local trends, tap into the enormous potential the energy industry represents for this city and region, and bring family-sustaining jobs back to Philadelphia?
Drawing on the important work of the Mayor’s Manufacturing Task Force, a true partnership of the local business community, City Council, the Mayor’s Office, PIDC and others, the Greater Philadelphia Chamber of Commerce would like to recommend a series of action steps for Council’s consideration. If implemented over the next 3 years, these steps can go a long way towards creating a more vibrant economic future that includes the manufacturing and energy industries – and real, sustainable job growth in Philadelphia.
Action Step 1: Expand the city’s existing Job Creation Tax Credit program to incent manufacturing and energy companies to locate and create jobs in Philadelphia.
Currently, the City offers employers the Philadelphia Job Creation Tax Credit, thanks to Councilman Goode, in addition to the Commonwealth’s Pennsylvania Job Creation Tax Credit. Both of these programs offer a specified amount of tax credits off the city’s Business Income and Receipts Tax as a company creates new jobs. We recommend expanding the existing tax credit further for manufacturing and energy sector businesses – as an additional incentive to existing businesses and businesses considering locating in Philadelphia.
Action Step 2: Partner with Local Energy Industry Leaders and Promote Expansion of Existing Pipeline Capacity to Bring Marcellus Shale Gas to City and Region
Through the leadership of executives such as Phil Rinaldi of Philadelphia Energy Solutions and many others, our Greater Philadelphia Energy Action Team is working to increase the supply of natural gas and natural gas liquids available to manufacturers in the city and region by increasing pipeline capacity. Adding additional pipeline capacity will allow more natural gas and gas liquids to flow into Greater Philadelphia – which will provide a strong, competitive advantage to the chemical and petrochemical companies already here – and to those considering locating new facilities here. An expanded pipeline capacity = more jobs in Philadelphia.
City Council can and should use its authority to convene citizens and stakeholders to consider the expansion of our pipeline capacity through Philadelphia, and work with the business community and these stakeholders to approve any legislative steps as needed to make this a reality.
Action Step 3: Preserve By-Right Zoning in Industrial Corridors
City Council should use a careful approach when evaluating zoning. While there is a large amount of residential and commercial development happening across the city – a good thing – we need to preserve large scale industrial zoning. It is particularly important to do so along the Lower Schuylkill Riverfront and portions of the Delaware Waterfront, since those locations are close to needed infrastructure like rail lines, ports and highways. These tracts of land are a vital component of attracting new companies to the region, and we cannot become an energy hub without them. Councilman Bobby Henon should be commended for his work on this action step, as should the Manufacturing Task Force.
Action Step 4: Expand vocational technical training curriculums at city colleges and high schools that align to the needs of manufacturers
City Council and the Mayor have an opportunity to set in local ordinance and state law specific steps for the Philadelphia School District to implement more vocational and technical training programs. The School District has just begun to seek partnerships with industry leaders to introduce students to careers in energy or manufacturing.
City Council can influence the Community College of Philadelphia as well. At present, CCP has no program or curriculum around manufacturing technology. I was honored to serve on the search committee that led to President Generals’ hiring, and he has begun to focus on developing curriculum around manufacturing technology and manufacturing and process engineering. Council should strongly advocate for this action step. A more robust degree and certificate program in these curriculums could put many Philadelphians on a strong career path that doesn’t need a four-year degree.
To further drive home the benefits of a career in manufacturing or energy, we recommend a campaign that would educate Philadelphia youth and their families about the opportunities available.
Action Step 5: Engage in further discussions with UIL concerning PGW
Lastly but certainly not least, we respectfully ask that City Council engage in a public process with UIL concerning its agreement to purchase the Philadelphia Gas Works. While neither the Chamber of Commerce nor our Energy Action Team presume to tell this legislative body what course of action to take, we do believe that resuming and continuing a dialogue with UIL, to ascertain whether common ground can be found, to see whether Council can reach a comfort level with this transaction in the best interests of Philadelphia citizens, will send a positive signal to companies national and international that are watching our city very closely right now.
After a half century of job loss and population decline, Philadelphia is growing again. Our population has inched back above 1.5 Million. But we need jobs and pro-growth policies to sustain that populace. Manufacturing jobs generally – and manufacturing employment that is energy-related specifically – pay higher wages that better support our families, neighborhoods and growth citywide.
If we do not create the next Energy Hub city – and I believe we will – it will, most assuredly, rise up somewhere else.
If we work together – as I believe we must – our shared vision of Philadelphia as the next, great Energy Hub city in America will become a reality.
Thank you for the opportunity to testify today.