Warehouse Tax Faces Opposition in the Commonwealth

This story originally appeared on the Oct. 3, 2017 of the WBRE nightly news.

By: Andy Mehalshick

Controversy is unfolding across Pennsylvania this week over a proposed new state tax on the commercial warehousing businesses.

Supporters of the levy say it would raise much needed revenue for the cash strapped Commonwealth. While critics argue it would be a death blow to the fastest growing segment of our state and region’s economy. The I-Team’s Andy Mehalshick sorts out the facts.

Kyle Dickinson is a manager at Valley Distributing and Storage Company in Wilkes-Barre. He says a proposed 6 percent tax could kill the warehousing industry in the region and the state.

“We’re not as attractive and they will look elsewhere for those opportunities,” noted Dickinson

Governor Tom Wolf first proposed the tax in February as a way to raise $153 million dollars.

He argued it would fill the financial void created by the lack of a natural gas severance fee.

Money needed to address a $3 billion dollar budget shortfall but business leaders say this new tax is a job killer.

“You’re actually going to impact a lot of jobs in this area,” noted Wico Van Genderen. Wico Van Genderen is President of the Wilkes-Barre Chamber of Commerce. He says warehousing and distribution companies have created 10,000 jobs in our region in the last several years and more companies are moving in.

“We are building momentum in Pennsylvania and to me this tax will certainly slow that momentum down,” added Van Genderen.

Lawmakers from both sides of the aisle from Northeastern Pennsylvania say they will fight the proposed tax.

“Since 2007 we’ve seen a 57 percent growth in employment in this industry and talk about putting a tax on this which is now our competitive advantage not only for Northeastern Pennsylvania but all of Pennsylvania is really going to start going back in the other direction,” said Republican Aaron Kaufer of Luzerne County.

The Governor first proposed the tax but it was not included in any budget plan in the house and senate.
Then last week the Republicans resurrected the proposal.

The I-Team’s Andy Mehalshick spoke with lawmakers –both Democrats and Republicans from our region late today and they tell him the warehouse tax is facing stiff opposition. They are confident it will not be passed but they admit anything can happen in this state budget crisis.