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A new report finds there are still no takers for the massive EDGE state tax credit enacted three years ago.
No tax credits were awarded in Fiscal Years 2022-23, 2023-24 and 2024-25 under the Pennsylvania Economic Development for a Growing Economy tax credit umbrella, according to a review by the Independent Fiscal Office.
That's zilch activity for the four EDGE tax credit components: local resource manufacturing, regional clean energy hubs, biomedical manufacturing and research and milk processing.
The $2 billion tax credit covering a 25-year lifespan was enacted in late 2022 near the end of former Gov. Tom Wolf's term in office. It's designed to spur business investment and create new jobs.
But complaints surfaced the first year that EDGE set required investment amounts and job creation requirements that are too high to attract investors.
Gov. Josh Shapiro and lawmakers of both parties have introduced bills to revamp the EDGE terms or add new tax credits to the portfolio.
There was speculation that an EDGE rewrite would become part of the state FY 2025-26 budget.
But when the budget was enacted four months late last November, that wasn't included.
The budget creates a new Working Pennsylvanians tax credit.
EDGE revisions tied to energy issue
The future of the EDGE tax cut is increasingly linked to the contentious debate over Pennsylvania's energy policy.
Sen. Gene Yaw, R-Lycoming, recently introduced Senate Bill 1106 to include certain baseload power generation projects as part of EDGE.
Yaw sees an urgency to acting on SB1106.
"Our electric grid is experiencing the most rapid demand in decades, yet we continue to retire reliable power sources faster than when we can replace them," he said. "I believe there is increasing awareness among lawmakers that we cannot afford to delay meaningful action."
"While movement on this legislation rests with the (Finance Committee) chairman and Senate leadership, I am hopeful they recognize the urgency of this issue and the role a revamped EDGE program can play in addressing it," Yaw added.
SB1106 defines an eligible project as one that "generates and adds power to a regional transmission grid by being interconnected to this Commonwealth's energy grid capacity in compliance with the interconnection or applicable regional grid operator standards."
As part of his Lightning Plan, Shapiro proposed revamping EDGE to add a $100 million Reliable Energy Investment tax credit for new energy sources to the grid.
The governor also proposed lowering eligibility requirements for hydrogen hub projects, providing new incentives for semiconductor and biomedical research and expanding the dairy processing credit.
The Democratic-controlled House approved House Bill 500 containing those changes last spring.
Shapiro has an opportunity to address the issue again when he delivers an annual budget address on Feb. 3.
The House Finance Committee approved House Bill 1556 last fall adding an Advanced Clean Manufacturing tax credit to EDGE. The panel approved HB1556 by a party-line vote with Democrats supporting and Republicans opposed.
HB1556 sponsored by Rep. Elizabeth Fiedler, D-Philadelphia, would help manufacturers use recycled materials and make energy efficient products such as heat pumps.