On June 14, the Pennsylvania Senate correctly voted to check Governor Wolf’s unilateral attempt to enter the Commonwealth into an interstate compact without legislative consent. SB 119 (Pittman) provides for legislative authority over a carbon tax, or a multi-state compact (RGGI), if entered. This legislation passed with bipartisan support, by a vote of 35-15.
NFIB opposes Pennsylvania’s entry into the Regional Greenhouse Gas Initiative (RGGI), and we have spoken publicly about our concerns, including at the Environmental Resources and Energy Committee’s June 23, 2020 hearing (see our testimony here).
Even though NFIB’s members will not be impacted directly by the taxes imposed by RGGI, there are numerous second- and third-order impacts that will harm small business, in many ways disproportionately to other businesses. This is especially true during the economic crisis we experienced because of business shutdowns during the COVID-19 emergency declaration. Small businesses have struggled to keep their doors open. Policymakers should do everything they can to keep small businesses above water in our communities, and especially avoid imposing new costs on these job creators.
First, small businesses are particularly sensitive to the energy cost increases RGGI will impose, especially energy-intensive small businesses like laundromats, car dealerships, convenience stores and small manufacturers. Tight margins, especially now, make it difficult to adjust the price of their goods and services or to change business practices quickly enough to manage steep increases. And unlike many big businesses, they are usually much too small to negotiate reduced rates from electric suppliers.
Pennsylvania is fortunate to have copious energy resources and a competitive energy market, which keep prices lower here than in other states, including all RGGI states. Pennsylvania small businesses will need this advantage now more than ever as they look toward recovery.
Second, the impact on Pennsylvania’s economy of the closure of coal-fired and some natural gas power plants will not be limited to the energy workers displaced. The ripple effects of these closures, especially when unemployment is high, will be devastating. Jobs will be lost not just in the power plants, but thousands more with their suppliers and in the small grocery stores, garages, contractors, retailers, and other businesses serving surrounding communities.
Finally, given the dire economic consequences of entering RGGI, it is extremely important for policymakers to consider whether the benefits of the proposal are worth the considerable costs. NFIB appreciates that SB 119 will mandate a thorough examination of direct and indirect costs of RGGI to the private and public sectors, including industry sectors like small businesses; the impact on the cost of goods, services, and productivity; and effects on the state’s energy resiliency. Importantly, it also asks that less costly, less intrusive alternatives be examined.
At a time when our communities – and particularly our small businesses – are reeling from the devastating effects of the COVID-19 shutdown, it is critically important that the impacts of RGGI are fully considered, debated, and voted upon by legislators, and not enacted by executive fiat. PMA Applauds Senate Passage of SB 119
Thank you to the 35 members of the Pennsylvania State Senate who voted YES to Senate Bill 119:
Sen. David Argall, Sen. Ryan Aument, Sen. Lisa Baker, Sen. Camera Bartolotta, Sen. Jim Brewster, Sen. Michele Brooks, Sen. Pat Browne, Sen. Jake Corman, Sen. John DiSanto, Sen. Cris Dush, Sen Marty Flynn, Sen. Wayne Fontana, Sen. Chris Gebhard, Sen. John Gordner, Sen. Scott Hutchinson, Sen. John Kane, Sen. Wayne Langerholc, Sen. Dan Laughlin, Sen. Scott Martin, Sen. Doug Mastriano, Sen. Bob Mensch, Sen. Kristin Phillips-Hill, Sen. Joe Pittman, Sen. Mike Regan, Sen. Devlin Robinson, Sen. Mario Scavello, Sen. Pat Stefano, Sen. Christine Tartaglione, Sen. Robert Tomlinson, Sen. Elder Vogel, Jr., Sen. Judy Ward, Sen. Kim Ward, Sen. Lindsey Williams, Sen. Gene Yaw, Sen. John Yudichak