From PA Chamber of Business & Industry

Beginning in January of 2020, the Pennsylvania Department of Revenue will begin to assess the state’s Corporate Net Income Tax on out-of-state corporations that do business in the Commonwealth. 

The change in policy comes on the heels of last year’s U.S. Supreme Court decision in South Dakota v. Wayfair which found that states can collect sales tax from corporations that, while not physically located within the states’ boundaries, do business within the state.  According to a Corporate Tax Bulletin issued by the Department, corporations that aren’t located in the state but have “$500,000 or more of direct or indirect gross receipts pursuant to their sales factor” sourced to Pennsylvania will be required to pay the state’s CNI tax.  The gross receipts sales can be factored from a combination of the following three categories: 1. the sale, rental, lease or licensing of tangible personal property; 2. the sales of services; and/or 3. the sale of licensing of intangibles, including franchise agreements. 

The Wolf administration has not publicly stated how much additional revenue this expansion of the CNI tax is expected to bring into the state’s General Fund.  The tax generated $3.4 billion in the 2018-2019 fiscal year.

• DRIVE will host an Open House tomorrow, Thursday, Oct. 17, from 4-6 p.m., at its new office building located at 418 Railroad St., Danville (in the old Metso Minerals Building). Come check out the newly renovated DRIVE office space and common areas, which include a 700 square foot training room available for daily rental and 24,000 square feet available for fit-out and lease. Refreshments will be provided. RSVP by emailing or call 570-284-4296. 

• The October newsletter from Danville Child Development Center is now available. 

• The Children’s Museum, The Exchange, the Bloomsburg Area YMCA, AGAPE and Bloomsburg Theatre Ensemble will team up to hold Boo!burg, a free Halloween event, at the Children’ Museum, on Friday, Oct. 25, from 5:30-8:30 p.m. Enjoy Trunk-or-Treat, children’s crafts and games, marshmallow roasting, a costume contest, watch a great pumpkin drop and more. 

• There will be a fun, Halloween-themed, family-friendly fundraising event on Saturday, Oct. 26, at Hawkins Chevrolet, located at 1856 Montour Blvd. (Rt. 11), Danville, to benefit the Montour Area Recreation Commission, which manages the Montour Preserve. This event is being hosted by the Danville Business Alliance and several other Danville-based organizations. It will feature an obstacle course, pumpkin toss, trunk or treat and much more. All proceeds raised from the event will benefit MARC, which currently does not have enough funding to sustain operations beyond next fall. For additional information, visit the Facebook event page, and view the below video. 

• Hand in Hand Family Resource Center will present a special Halloween edition of C.A.M.P.S. (Construction, Art, Music, Play, Sensory), called Tricks & Treats on Sunday, Oct. 27, from 2-5 p.m. at Arnold’s Golf Course in Mifflinville. The event will begin with a Halloween golf cart parade (with golf card decorated by local families), and then will move onto the C.A.M.P.S. program, which will include: building haunted houses from recycled materials, skeleton handprints, apple, pumpkin and potato stamping, blowing ghost paintings, making musical instruments, eyeball putting, pumpkin bowling, and more. This free event (which includes a suggested but not mandatory donation to benefit Hand in Hand), is for all ages and every ability. For more information, visit the Facebook event. 

More information about the Opportunity Zone program

Economic development organizations from the region gathered recently at Monty’s on the Upper Campus of Bloomsburg University to learn more about a Federal program designed to spur development in selected communities. Qualified Opportunity Zones were created as part of the 2017 Tax Cuts and Jobs Act. The program provides tax benefits for investing eligible capital into designated zones.  

Investors who realize capital gains can defer their tax liability by investing in Qualified Opportunity Funds (QOF), which are established to provide funding for projects in Opportunity Zones. Funds can be used to invest in commercial properties, housing, and stock or interest in a business. If funds are held in a QOF for at least five years, 10% of the liability on the investment is eliminated. If the investment is held for at least seven years, an additional 5% of the liability is eliminated. If the investor holds the investment for at least 10 years, when the investor sells or exchanges the investment, the liability for the gain on the increased value of the investment is also eliminated. There are deadlines for investing funds in order to maximize tax benefits.

Opportunity Zones were established by census tract based on economic demographics. There are zones in significant areas of Berwick, Bloomsburg, and Danville. Congressman Dan Meuser spoke about the program with Chamber members in August. Meuser attended the workshop in early October which was sponsored by State Senator John Gordner and SEDA-COG. Representatives Kurt Masser and David Millard were also in attendance.

The Chamber has been in discussions with other economic development groups about potential projects in the three local zones.

More than 400 businesses and organizations belong to the Chamber to receive benefits and support efforts to strengthen their businesses and our region. Increased membership allows us to offer additional programs and benefits, have a stronger voice in advocacy and be involved in more activities and initiatives in our communities. The Chamber welcomes its newest member, Pennsylvania MENTOR, to help us fulfill our mission.

Pennsylvania MENTOR is a leading home and community-based human services provider that serves individuals, both adults and children, with intellectual or developmental disabilities, as well as emotional, behavioral and mental health challenges. Part of how they go about serving the children among this population is through therapeutic foster care and foster parents, which are called “Mentors.” Founded in 1989, Pennsylvania Mentor is part of The MENTOR Network, which is in 36 states. Pennsylvania Mentor will soon be opening an office in the Columbia/Montour region, and can be reached at 570-982-4112, by email, or visit its website. 

Conference Agenda

The United Way of Columbia and Montour Counties will hold a United in Recovery Employer Conference on Friday, Nov. 8, from 8 a.m. – 4 p.m. at the Henry Hood Center on the campus of Geisinger Medical Center. There is no cost to attend and anyone is welcome. 

This conference will feature several sessions designed to make employers better aware of various aspects of opioid awareness. Session topics include: supervisor training; benefits of an employee assistance program (EAP); signs and symptoms of substance misuse; drug testing in a drug-free workplace; tools and techniques for reasons suspicion; why hire those in recovery and more. 

Sponsors of the event include the Chamber, Pine Barn Inn and Henry Dunn Insurance. Both a continental breakfast and lunch are included. Registration is preferred but not required, and can be done by emailing the United Way. For additional conference details or information about United in Recovery, visit the United Way’s website. 

From Penn State World Campus

Note: Employees of all Columbia Montour Chamber members, their spouses and dependents are eligible for a 5% discount on tuition through the PSU World Campus. 

A partnership between Penn State and the U.S. Army has been helping to transform the way the military branch teaches its soldiers to be leaders since 2015.

Nearly 80 Army sergeants major have graduated with a master’s of education in lifelong learning and adult education through Penn State World Campus, thanks to the partnership between World Campus, the College of Education, and the U.S. Army Sergeants Major Academy Fellowship Program (USASMA).

The program has graduated four cohorts and 78 sergeants major, and the most recent graduates were recognized at a celebration at Fort Bliss in El Paso, Texas, on Aug. 27. A fifth cohort arrives this week.

Sergeants major from the U.S. Army Sergeants Major Academy Fellowship Program attended Penn State commencement in Aug. 2019. IMAGE: GREG BOND

Many Fellows have continued their careers as educators in and out of the military, including in the El Paso public school system, working in the U.S. government, or as students pursuing other degrees in higher education. Alumni have assumed leadership posts at organizations including the Non-Commissioned Officer Leadership Center of Excellence, the Department of Command Leadership, the National Guard Bureau, and the Nebraska National Guard. A program graduate also became the Army’s first enlisted soldier to publish a peer-reviewed article in the Journal of Military Learning.   

One sergeant major, Robert Nelson, became the Army’s first noncommissioned officer to be selected for a fellowship in national security and foreign policy at the Massachusetts Institute of Technology. A 2018 Penn State graduate, Nelson now serves as an instructor in the Department of Army Operations and said the Army uses problem-based learning methodologies geared toward adults and adult learners.

“We’re providing structure and teaching sergeants based on experience and pertinent learning methods,” Nelson said. “Penn State has helped us use our model better and improve it.”

The Penn State-USASMA partnership is part of a broader push from the Army to change the way soldiers are taught, according to Command Sgt. Maj. David Lee, who earned his Penn State degree in 2016 and is now the USASMA director.

“We want to become facilitators and foster collaborative environments for adult learners,” Lee said. “We want younger sergeants, as they come up, to understand how to be a trainer and how to be an educator. What we want to see in the field, as we push this model down, is for students to understand how they as adult learners learn best.”

After completing their master’s degrees in one year, Fellows teach three years in the Sergeants Major Course, which prepares the military’s next generation of leaders with the skills they need on and off the battlefield. USASMA trains more than 750 newly selected sergeants major for future service in the Army.

Sgt. Maj. Deitra Alam, who attended Penn State’s summer commencement in August along with 13 members of her cohort, said the course work helped her see the difference between being a trainer and an educator.

“That was the big light bulb moment for me,” she said. “You have to take many things into consideration when you’re teaching adults. You need to consider the process of it, what capitalizes on the strengths of your adult learners, and how to design programs that cater to that.”

For Nelson, who is simultaneously pursuing a doctorate in education, he said his future would not have been possible without Penn State.

“Penn State really gave me the confidence to pursue higher education further on in my life,” he said. “I want to take what I’ve learned from Penn State and influence curriculum design to incorporate more adult learners.”

Visit the Penn State World Campus website for more information.

Members and guests had an opportunity to see Service 1st Federal Credit Union’s newest branch in Elysburg, which opened earlier this year, learn about Service 1st’s various business and consumer products, and connect with Service 1st staff during the first of two Business After Hours in October, held on Thursday, Oct. 10. Attendees also enjoyed some food from the nearby Nickle Plate Barr & Grill. The Elysburg branch is the credit union’s 12th location, and it opened this past spring after being announced that it would open last fall. 

Business After Hours provide regular opportunities to build business relationships while learning about the services offered by other Chamber members. The next Business After Hours will be held at Berwick Hospital Center, located at 701 East 16th St., Berwick, on Wednesday, Oct. 23, from 4:30-6:30 p.m. 

From PA Chamber of Business & Industry

The Pennsylvania Chamber of Business and Industry is proud to join Gov. Tom Wolf in recognizing October 2019 as “Local Chamber of Commerce Month” in the Commonwealth. 

“Local chambers are the lifeblood of Pennsylvania’s cities and towns,” said PA Chamber President and CEO Gene Barr.  “The PA Chamber is proud to recognize Pennsylvania’s more than 200 local chambers, as they work every day to support the businesses in their communities.  They are invaluable partners in our advocacy efforts and we look forward to building on these strong relationships as we collectively work to improve the Commonwealth’s business climate.”

The governor’s greeting highlights the important role local chambers play in communities throughout the state: “Our local chambers of commerce play a critical role in supporting the needs of our vibrant business community, and are essential to the Commonwealth’s continued economic growth and advancement.”

The tie between the PA Chamber and local chambers of commerce dates back to the PA Chamber’s founding in 1916, when a group of influential business leaders and local chamber officials recognized the need for a unified voice of business at the state level.  While local chambers are independent organizations, they often work in partnership with the Pennsylvania Chamber to advocate for pro-business issues in the halls of the state Capitol; most notably, during the annual “Chamber Day at the Capitol” in June when representatives from local chambers of commerce visit Harrisburg for a day of networking and meetings with top policymakers to discuss issues that impact the state’s business community.

• Wild For Salmon will hold a fall tasting event on Saturday, Oct. 12, at its store at 521 Montour Blvd. (Rt. 11), Bloomsburg, from 9 a.m. – 3 p.m. Come out and taste some samples of sockeye salmon tortilla soup, keta salmon power bites, holiday shrimp dip, and 7-layer salmon dip.

• DRIVE will host an Open House on Thursday, Oct. 17, from 4-6 p.m., at its new office building located at 418 Railroad St., Danville (in the old Metso Minerals Building). Come check out the newly renovated DRIVE office space and common areas, which include a 700 square foot training room available for daily rental and 24,000 square feet available for fit-out and lease. Refreshments will be provided. RSVP by emailing or call 570-284-4296. 

• The Children’s Museum, The Exchange, the Bloomsburg Area YMCA, AGAPE and Bloomsburg Theatre Ensemble will team up to hold Boo!burg, a free Halloween event, at the Children’ Museum, on Friday, Oct. 25, from 5:30-8:30 p.m. Enjoy Trunk-or-Treat, children’s crafts and games, marshmallow roasting, a costume contest, watch a great pumpkin drop and more. 

• There will be a fun, Halloween-themed, family-friendly fundraising event on Saturday, Oct. 26, at Hawkins Chevrolet, located at 1856 Montour Blvd. (Rt. 11), Danville, to benefit the Montour Area Recreation Commission, which manages the Montour Preserve. This event is being hosted by the Danville Business Alliance and several other Danville-based organizations. It will feature an obstacle course, pumpkin toss, trunk or treat and much more. All proceeds raised from the event will benefit MARC, which currently does not have enough funding to sustain operations beyond next fall. For additional information, visit the Facebook event page, and view the below video. 

• Hand in Hand Family Resource Center will present a special Halloween edition of C.A.M.P.S. (Construction, Art, Music, Play, Sensory), called Tricks & Treats on Sunday, Oct. 27, from 2-5 p.m. at Arnold’s Golf Course in Mifflinville. The event will begin with a Halloween golf cart parade (with golf card decorated by local families), and then will move onto the C.A.M.P.S. program, which will include: building haunted houses from recycled materials, skeleton handprints, apple, pumpkin and potato stamping, blowing ghost paintings, making musical instruments, eyeball putting, pumpkin bowling, and more. This free event (which includes a suggested but not mandatory donation to benefit Hand in Hand), is for all ages and every ability. For more information, visit the Facebook event. 

• Providence Engineering will host a special AIA accredited event presentation titled Structural Engineers: Why we do what we do on Wednesday, Nov. 6, from 8 a.m. – 1 p.m. at the Blair County Convention Center, located at One Convention Center Dr., Altoona. As Design Professionals plan their designs, and as Contractor personnel encounter conditions that just won’t meet design criteria, it is important that they understand “Why” the Structural Engineer produces the designs with which they are engaged, so that all might enter into educated discussions of alternatives. This seminar will provide an overview of what is important to Structural Engineers in the use of soils, concrete, masonry, hot-rolled steel, cold-rolled steel, PEMBs, wood, and fasteners in typical designs. 4 LU/HSW credits are available. For more information or to register, visit online. 

From PA Treasury

Read entire PA Treasury Notes (includes informational graphics)

A changing twenty-first century economic landscape along with the generational shift away from pensions or “defined benefit” plans to 401(k)s or “defined contribution” plans–or no plan at all–has left too many Pennsylvanians behind. In this issue of Treasury Notes, we will present some underlying causes of our retirement crunch, and the stark consequences that will affect us all if Pennsylvania does not act.

For decades, many Americans could draw on all “three legs of the retirement stool:” retirement savings plans, pensions and Social Security. According to the Social Security Administration (SSA), the average worker can expect 40 percent of their earnings to be replaced by Social Security payments. That’s about half of what financial advisors recommend to maintain one’s pre-retirement standard of living.

Pensions’ share of our retirement pie is declining. In 1983, according to the Center for Retirement Research at Boston College, 62 percent of private sector workers with a retirement plan had a pension. This number declined to just 17 percent of workers by 2016. 

While defined contribution plans have increased, they have not offset the decline in pensions leaving a gap in coverage for Pennsylvania workers. Depending on how various surveys treat the cash value of existing pension benefits, one-third to one-half of private sector American workers report having zero retirement savings. According to both Pew Charitable Trusts and AARP, about 44 percent of Pennsylvania workers ages 18 to 64–or 2.1 million people–in the private sector work for businesses that do not offer any retirement plan. To put this number into context, if 2.1 million Pennsylvanians banded together to form a new locality in our Commonwealth, it would result in a city larger in population than Philadelphia, Pittsburgh, Allentown, and Erie combined.

Small businesses face disproportionate burdens of cost, complexity, and potential legal liability when offering retirement plans. A Pew analysis concluded that costs for a small business to offer a retirement plan can be four times higher than those available to a larger employer. The Employee Retirement Income Security Act of 1974 or “ERISA” is a federal law originally passed to ensure pensions and other employer-sponsored benefits are properly funded and managed. Chief Justice John Roberts in a 2010 case noted that ERISA “is an enormously complex and detailed statute….many ERISA matters….are exceedingly complicated.” ERISA provides for damages, class-actions, as well as plaintiffs’ attorney fees in most cases. ERISA also imposes fiduciary duties on plan managers, the highest legal duty available in the common law legal system.

The result? 71 percent of small employers in a recent Pew survey said that a retirement plan was simply too expensive to set up. And, according to the Transamerica Center for Retirement Studies’ Survey, nearly three-quarters of employers that do not offer their workers a defined contribution plan are not likely to implement the option any time soon.

Econsult Solutions, at the request of Treasury, examined the Commonwealth’s broad demographic trends, current retirement savings, and any net fiscal impact on the state if nothing changes. The oldest baby boomers (born between 1946 and 1964) first reached 65 in 2011 and will continue to retire through 2029. The disproportionate share of boomers across the United States and the consequences of their retirement are difficult to understate. Per Econsult, “these demographic changes will be especially pronounced in Pennsylvania, which is currently the seventh oldest state in the nation…the near-retiree age groups from 50- 64…collectively represent 2.7 million residents…or 21 percent of the state’s population. Projections from the Pennsylvania Independent Fiscal Office (IFO) estimate that the population of residents age 65 and older will increase to 3.1 million by 2030, representing 23 percent of the state’s population.”

The nation’s muddled, incomplete transition to defined contribution plans coupled with Pennsylvania’s rapidly aging population, will impact the Commonwealth’s bottom line. If we do nothing, Pennsylvanians’ collective lack of retirement savings will mean reduced economic activity, fewer jobs, and lost tax revenue.

Workers retiring with scant to no savings will qualify for a slew of federally-mandated public benefits including food stamps, Medicaid, and other types of assistance. Econsult’s study further found that “in 2015, the state spent $4.2 billion in state assistance costs for elderly residents, more than half of which was for assistance for the 21 percent of the population with $20,000 or less in household income. State assistance costs would have been $702 million less if elderly households had sufficient retirement savings. In 2030, the state would spend $1.1 billion less if elderly households had sufficient savings.” In other words, our poorly designed retirement system will add a cumulative $14.3 billion in assistance costs to the already strained state budget over a 15 year period.

To put $14.3 billion in context, that’s triple what the state will spend over the course of the recently enacted 2019-2020 budget on state agricultural programs, community and economic development, conservation, state parks, criminal justice including state prisons, drug and alcohol programs, community college aid, state financial aid, environmental protection, children’s health care, public libraries, and the overhead costs of the Governor, Lt. Governor, Attorney General, Auditor General, and Treasury combined.

In 2017, the PA Treasury created the Pennsylvania Treasury Task Force for Private Sector Retirement Security–a bipartisan group of policymakers, experts, and other stakeholders–to not only gather information on the state of the crisis, but to find solutions.

Next week, look for another article from the PA Treasury that discuss this Task Force’s proposal for the Commonwealth: a scaled, automated retirement account or “auto-IRA.”