DCED Budget Hearing Recap: Key Programs, Policy Debates, and Follow-Up Commitments
The House committee convened for the Department of Community and Economic Development (DCED) budget hearing. Committee leaders reviewed hearing rules, swore in testifiers, and set the frame for the day’s discussion around the Governor’s 2026–27 proposal and what members described as significant year-over-year changes in DCED’s General Fund line items.
Secretary Rick Siger (DCED) delivered opening testimony outlining the Administration’s economic development priorities and DCED’s major initiatives, then responded to questions across housing, energy, broadband, workforce, tourism, tax credits, and oversight.
Hearing setup and context
- Rules/Process: The chair reviewed committee procedures and time limits, and testifiers were sworn in before testimony began.
- Budget framing: Chairman Struzzi noted the Governor’s proposed General Fund spending amount of $277.8 million, described as an overall decrease of $236.4 million (46%) compared to the current fiscal year, and asked for clarity about what that decrease reflects.
- Votes: No committee votes were taken during this hearing.
Opening remarks and Secretary’s presentation: DCED overview
Secretary Siger tied his testimony to the Administration’s 10-year economic development strategy and highlighted DCED accomplishments and tools used to compete for projects:
- PA Sites program: Cited as a major competitiveness tool for pad-ready sites; the program was previously funded at $500 million, with DCED describing awards and ongoing grant rounds.
- Main Street Matters: Continued annual funding and program evolution (including investments in “anchor buildings” under newer guidelines).
- Neighborhood Assistance Program (NAP): Discussed as expanded and oversubscribed (details and oversubscription numbers were discussed as follow-up items).
- Tourism: Secretary referenced statewide tourism performance and the link to upcoming major events (America 250) in his opening remarks.
- Major corporate wins: Examples referenced included Eli Lilly and Johnson & Johnson (and discussion later about incentives and the Commonwealth’s “speed and certainty” permitting approach).
Budget proposals highlighted by the Secretary
Secretary Siger outlined the following headline proposals (as presented and reiterated throughout questioning):
- Innovate in PA 2.0: A one-time $100 million proposal aimed at expanding venture investment and commercialization, with a life-sciences focus.
- PA First: Proposed +$10 million to increase flexibility to close business deals.
- Advance PA tax credit (new): Consolidation/streamlining of three underused tax credits into a new discretionary credit intended to better support job creation and growth.
- PA EDGE updates: Proposed changes to encourage jobs, innovation, and energy projects (also discussed as part of the Governor’s energy “Lightning Plan”).
- Workforce programs:
- A dedicated WebNetPA training line ($12.5 million)
- A $2 million Career Connect internship initiative
- Continuation of existing initiatives: Main Street Matters, Historically Disadvantaged Business Assistance, Manufacturing PA, and related programs.
- Housing Action Plan + institutional changes:
- A proposed $1 billion “Critical Infrastructure Fund” (capital mechanism to support housing/community infrastructure)
- Modernization of the municipal planning code
- Creation of a DCED Deputy Secretary for Housing
Secretary also emphasized fast-track permitting via the Office of Transformation and Opportunity and described expanded planning/technical assistance capacity for municipalities.
Legislation and policy items explicitly referenced during the hearing
The following statutes, programs, and policy proposals were discussed and/or referenced by members and the Secretary:
- Act 45 of 2025: Ending Pennsylvania’s participation in RGGI; also included a transfer of $50 million from gaming to tourism promotion with $40 million for America 250 and $10 million for the NFL Draft (as referenced in the hearing discussion).
- Broadband / BEAD: Pennsylvania Broadband Development Authority’s BEAD Final Proposal, NTIA conditional approval, and deployment/prevailing wage classification concerns.
- Innovate in PA: Innovate PA 2.0 proposal, references to Innovate 1.0, and discussion of Ben Franklin Technology Partners.
- PA Sites program: Prior funding level and ongoing implementation.
- PA First, PA EDGE, Advance PA proposals.
- Main Street Matters expansion and demand pressures.
- NAP tax credit expansion (to $72 million) and oversubscription.
- Tax credit consolidation: Including proposed elimination/consolidation of underutilized credits such as the Waterfront Tax Credit.
- Governor’s Lightning Plan (energy plan): Including a siting/permitting “reset” board concept and PA EDGE energy-related changes.
- Proposed $1B Critical Infrastructure Fund (housing/community enabling infrastructure).
- Member-referenced bills/policies: HB 589 (landslide insurance), HB 985 (Johnstown flood tax repurposing referenced), a package of housing-related concepts (first-time homebuyer savings accounts, realty transfer tax exemptions, PMI deduction), and the Governor’s continued proposal to raise minimum wage to $15.
Significant testimony, exchanges, and outcomes (organized by topic)
Blight and downtown revitalization (Rep. Salisbury)
- Question/Concern: Rep. Salisbury described severe blight in older communities and the difficulty of attracting businesses to central business districts (example: Braddock Borough).
- DCED Response: Secretary described available tools including CDBG (blight eligibility) and Main Street Matters anchor building investments; he emphasized a strengthened DCED planning capacity (approximately 12 planners) to help municipalities develop targeted plans and identify funding sources, and offered to meet with local leadership to create a remediation strategy.
Energy policy, Act 45, and the Lightning Plan (Rep. Barton, Rep. Devanzo, others)
- Question/Concern: Members asked about impacts of leaving RGGI under Act 45 and what DCED is doing to support energy investment and competitiveness.
- DCED Response: Secretary said it was early to quantify impacts from RGGI exit, but described activity in the “energy economy” (including supply chain/manufacturing) and pointed to the Governor’s Lightning Plan and proposed changes to PA EDGE plus a “reset” board concept to help site critical energy infrastructure.
Innovate in PA 2.0 vs. Ben Franklin Technology Partners (Rep. King Cade, Rep. Madsen, Rep. Mullins)
- Question/Concern: Whether Innovate 2.0 duplicates Ben Franklin Tech Partners and whether Ben Franklin should instead receive direct increased allocations.
- DCED Response: Secretary emphasized Ben Franklin’s value and eligibility to compete but stated Innovate 2.0 is designed as one-time, competitive funding open to a wider ecosystem (universities, companies, and partners) and includes life-science-specific initiatives such as commercialization and clinical trial networks.
Waterfront Tax Credit elimination (Rep. King Cade)
- Question/Concern: Eliminating the Waterfront Tax Credit could harm waterfront revitalization in Western PA.
- DCED Response: Secretary argued the proposal reflects low utilization and the intent to optimize tax credits by shifting resources toward a more flexible, discretionary program (Advance PA) rather than signaling opposition to waterfront development.
Amazon data centers: incentive package and permitting (Rep. Brenner and others)
- Question/Concern: What incentives Pennsylvania provided for Amazon’s data center projects (Luzerne and Bucks Counties), and whether similar incentives remain available.
- DCED Response: Secretary described three components:
- Fast-track permitting via the Office of Transformation and Opportunity (emphasizing speed/certainty, not relaxed standards),
- Existing data center sales and use tax exemption (administered by the Department of Revenue), and
- A negotiated $10 million workforce training investment focused on Northeast PA to prepare trades and long-term technician talent.
Broadband BEAD funds and prevailing wage classification risk (Rep. Alzheimer)
- Question/Concern: NTIA “conditional approval” for Pennsylvania’s BEAD Final Proposal and concerns that prevailing wage classification for fiber work could inflate costs and reduce rural buildout; request for DCED’s plan to ensure the state does not lose $711 million.
- DCED Response: Secretary stated DCED had not yet received the precise conditional language; prevailing wage classification is handled by the Department of Labor & Industry, not DCED; and DCED expressed confidence that, at current rates, the plan would connect the targeted locations. He also cited a separate, smaller round of awards already underway (noting awards to projects connecting tens of thousands of locations).
Energy grid, permitting, and workforce (Rep. Rigby, Rep. Kozierowski, Rep. Krupa)
- Topics raised: PA Sites, attracting manufacturing (including US Steel / EAF-related discussion referenced in the summary), coordination with DEP on permitting, and broader competitiveness.
- DCED Response: Secretary emphasized that “fast track” means speed and certainty, not changing environmental rules; he pointed to state process reforms and described DEP backlog elimination and permit cataloging/time guarantees as part of improvements in speed and predictability for project sponsors.
Tourism investments: NFL Draft and America 250 (Rep. Rigby, Rep. Flood)
- Question/Concern: Why the Commonwealth is investing $10 million in the NFL Draft and how taxpayers will evaluate ROI, and how America 250 funding will be distributed statewide.
- DCED Response: Secretary defended the $10M as a strategic marketing investment and committed to providing economic impact reporting; he also stated America 250 funds would be deployed statewide through a balanced approach of marquee events and regional activations.
Housing Action Plan and the $1B Critical Infrastructure Fund (multiple members)
- Questions raised: Intent, administration, geographic targeting, and how the fund improves affordability and homeownership.
- DCED Response: Secretary described the Housing Action Plan as comprehensive (referenced as 28 initiatives in the summary), with the $1B fund aimed at scaling enabling infrastructure (site prep, utilities, wastewater/sewer, energy, schools, municipal facilities). The fund was described as a capital mechanism administered through the budget office with DCED advising and providing technical assistance; the plan was described as targeting a large housing supply gap by 2035.
Neighborhood Assistance Program (NAP) and Main Street Matters (Rep. Abney, Rep. Bellman)
- DCED points: NAP expansion to $72M; Main Street Matters increased to $20M; both programs were described as heavily oversubscribed; DCED discussed improving geographic diversity and technical assistance.
SSBCI tranches and Innovate 2.0 deployment (Rep. Fleming, Rep. Mullins)
- SSBCI: Secretary described SSBCI as performance-based across three tranches totaling ~$268 million, requiring a high spend-down threshold before drawing down subsequent tranches; DCED said it was spending through the second tranche and expected to request the third.
- Innovate 2.0: Reiterated as one-time funding focused on life sciences commercialization, talent pipelines, and ecosystem strengthening, with an emphasis on long-term returns.
Oversight and governance concerns: Fayette County / CEDO (Rep. Krupa)
- Concern: Allegations of related-party transactions, conflicts of interest, and governance issues involving a local CEDO (FayPenn) and questions about DCED oversight.
- DCED Response: Secretary committed to written follow-up, emphasized audit/fraud/waste/abuse capacity, and said DCED would investigate and respond with specifics.
Rural hospitals / Rural Health Transformation Fund (Rep. Kozierowski)
- Question: DCED’s role in rural hospital/regional care collaboratives under other programs (PREP regions; HHS grants referenced in the summary).
- DCED Response: Secretary described DCED as an advisory/governance partner, with another department as primary administrator, and said DCED would remain active to ensure business and community interests are represented.
Minimum wage (Rep. Khan, Rep. Guzman)
- Question/Concern: Continued proposal to raise minimum wage to $15 and index to inflation.
- DCED Response: Secretary reiterated the Governor’s position and cited DCED analysis estimating roughly 553,800 workers would benefit.
Child care investments and DCED’s role (Rep. Miller)
- Question: What DCED is doing to support child care as a workforce participation driver.
- DCED Response: Secretary stated DCED’s direct role is limited (with other departments leading), but referenced some financing/infrastructure tools and committed to coordination.
Data center siting, regional planning, and grid principles (Rep. Madsen, Rep. Kozierowski)
- Issues raised: Regional planning, transparency, utility coordination, water/workforce demands, and avoiding negative local impacts.
- DCED Response: Secretary supported regional planning and articulated principles such as transparency, community engagement, and aligning costs/benefits (as summarized: “bring your own power / pay your own weight / meet environmental standards”), with continued coordination across agencies.
Chester receivership / Chester Water Authority (Rep. Lawrence)
- Question: DCED’s posture after the Pennsylvania Supreme Court ruling on the City of Chester and Chester Water Authority.
- DCED Response: Secretary said the receiver would reassess strategy; DCED provides funding and monitors but remains arm’s length on operational decisions; DCED will continue to prioritize resident interests and city stabilization work.
Local government advertising / public notices (Rep. Lawrence, Rep. Daly)
- Concern: Decline of local newspapers and challenges meeting legal advertising/public notice requirements.
- DCED Response: Secretary said DCED had not taken a formal position but expressed openness to working with members to explore modern alternatives (e.g., a digital repository/central platform) while maintaining transparency and accountability.
Administrative notes and operational themes
- Technical assistance emphasis: Throughout the hearing, Secretary Siger repeatedly offered DCED planning staff and technical assistance support, including follow-up meetings with members and local governments.
- Permitting “speed and certainty”: DCED emphasized that fast-track permitting does not mean weakening environmental standards, but improving timelines and predictability for projects.
- Organizational structure: DCED discussed its internal reorganization to create BusinessPA (consolidated outreach/retention/attraction functions) while Team PA continues separately (as summarized), and offered performance framing comparing activity year-over-year.
Follow-ups committed by DCED / outstanding items
DCED committed to follow-up actions and/or additional detail on several topics, including:
- Written responses and program-level detail on DCED’s oversight/audit controls and the Fayette County CEDO allegations (including related-party reviews, recusals, certifications, and prior enforcement tools).
- NAP oversubscription numbers, plus additional detail on Main Street Matters awards and geographic distribution.
- Clarification once NTIA’s BEAD conditional approval language is received and DCED’s response plan regarding prevailing wage classification issues.
- Post-event economic impact methodology/reporting for the NFL Draft and broader America 250 allocations.
- Additional briefings on Innovate in PA 2.0 design, Innovate 1.0 metrics, and Ben Franklin Tech Partners’ role/eligibility.
- Continued coordination on regional/broadband/energy/data center siting issues, plus further work on public-notice modernization and childcare infrastructure models.
Summary assessment
The hearing presented DCED’s budget priorities centered on:
- Economic growth and site readiness (PA Sites; major corporate wins; permitting improvements),
- Innovation and life sciences commercialization (Innovate in PA 2.0; Ben Franklin discussions),
- Housing (Housing Action Plan; proposed $1B Critical Infrastructure Fund; institutional reforms),
- Broadband deployment (BEAD planning and federal compliance questions),
- Energy strategy (Lightning Plan and permitting acceleration),
- Tourism and major event marketing (America 250 and NFL Draft investments),
- And governance/oversight concerns (CEDO monitoring and follow-up commitments).