PACB sits down with State Senator Sean Wiley To Discuss Pennsylvania’s 49th Senatorial District, his role in the Senate Banking and Insurance Committee, the Commonwealth’s current economic state, bank shares tax, and more.
PACB President/CEO Nick DiFrancesco (ND): You have been Minority Chairman of the Senate Banking and Insurance Committee for just under a year now. What changes have you been seeing with regard to banking back in your district in Erie? What are your thoughts on the future of community banking in Pennsylvania?
Pennsylvania State Senator Sean Wiley (SW): Community banks occupy a vital place in Pennsylvania’s cities, boroughs, and townships. Since taking office, I have taken pride in amplifying the messages of great businesses and organizations throughout the 49th District. I would like to see the Banking and Insurance Committee take a similar role in helping Pennsylvanians understand just what makes community banks different than other banks, particularly the unique services that community banks offer to businesses, non-profits, and private citizens. But, the ideal future of community banking will be set by our communities’ bankers. It is my job as an elected official to listen to how you believe that can be done.
In that vein and to stay ahead of the curve regarding the broad range of issues within state government and the communities that we collectively serve, my staff and I created Senatorial Advisory Committees very early on in my term. We knew there was no possible way to be the expert in every arena, so why not put the real experts around the table to utilize their collective brain power in order to be the best informed we could be? I wish I could take full credit for the idea as it is likely one of the smartest decisions we’ve made. There are now 19 Senatorial Advisory Committees covering the gamut of disciplines with the newest one being Banking and Insurance. We have to be as well versed as possible in regard to the changing needs of the industry not only here at home, but also across the Commonwealth and I feel the best way to do that is to learn from those who live it every day. I don’t see learning from others to be a weakness, rather a strength.
ND: What are some of your priorities for the committee moving forward?
SW: I am grateful to have built a solid relationship with Chairman White. On the Senate Floor or over lunch, whether discussing committee business, current events, our families, or our last golf game, we respect each other – agree or disagree. I am proud that our staffs also get along and work together well. It is not an overstatement that preserving and cultivating those relationships is among my top priorities because they set the tone for everything that the committee does. As for more substantive matters, we need to listen to what Pennsylvania consumers and the banking and insurance communities need from us. While I have some ideas of what I would like to see in terms of financial education, availability of lending products to businesses and individuals, and opportunities to keep our banks competitive, the most important part of my job is listening to the people who live with the decisions we make. They are best-positioned to educate us on those issues.
And believe it or not, I am proud to say that I did beat Chairman White by a few strokes.
ND: Even as late as March, Standard and Poors threatened to downgrade Pennsylvania’s credit rating as a result of the budget impasse. Post 2015-2016 budget impasse what are your thoughts on the economic climate in Pennsylvania and where we stand today?
SW: Pennsylvania has the heart of a lion and the strength of champions. We are resilient and our people are among the best and the brightest. Our Commonwealth continues to be an epicenter of economic activity in its own right with existing and new partnerships with institutions of higher education providing cutting edge research and development opportunities.
I also believe the 49th District is poised for transformative changes over the next few years with the redevelopment of our Bayfront and other investments across Erie County.
Erie is fortunate to have one of two deep water ports in Pennsylvania. I was proud to support Act 89 of 2013 through which the General Assembly and Governor Corbett established a Multimodal Fund providing a dedicated stream of over $30 million per year to the capital our ports, rail, and other non-highway modes of transportation.
Erie’s manufacturing arena has transformed itself to focus on advanced manufacturing and industry partnerships, burgeoning relationships with Penn State Erie, The Behrend College for ongoing engineering, research and development opportunities. This is a model for our Commonwealth.
The heart of Erie is our small business sector. Supporting and encouraging our existing small businesses while creating an encompassing entrepreneurial eco-system, like the work of the Innovation Collaborative, is key to continued growth.
I believe it is the role of the General Assembly to continue to improve the business environment in Pennsylvania and allow the private sector to create jobs and build wealth throughout our Commonwealth.
The General Assembly must also learn from its past mistakes. Any credit downgrade is not desirable and has real implications for the Commonwealth. There are local consequences. School districts across Pennsylvania are facing the same challenges. Erie’s Public School system, also known as the City of Erie School District, is teetering on the edge of ‘junk bond status’ as their fiscal challenges are simply too vast to easily comprehend. Erie’s Public Schools has been the victim of chronic underfunding based on not having a formula by which the Commonwealth distributes education funding. Transactions readers know what having a junk bond status will do to the borrowing potential of Erie’s Public Schools, and so how does a district facing a $6 million deficit plan for the immediate future even think of long term?
ND: Taking a look at Governor Wolf’s proposed 2016-2017 budget, what is your view on the proposal and how we can find some common ground?
SW: The plan is centered on investing in education and addressing the structural deficit – two very important components of driving this Commonwealth moving forward. There is no question that the structural deficit exists, that the General Assembly must find a way to address it now and also include a comprehensive plan for future solvency. If you are dealing with billions of dollars at the state level or hundreds of dollars in a household, there are two sides to every budget – revenue and expense. It is vividly clear that this Commonwealth needs to address revenue and now the task at hand is how best to tackle the issue.
I was pleased to see the Governor’s commitment to continued efficiencies within and across departments. Pennsylvanians deserve a government that functions at the highest levels, across every department.
There is no need for history to repeat itself during this round of budget negotiations. We can find a common ground as the vast majority of my colleagues, both Democrat and Republican alike, are in agreement that investing in our public education system, job creation programs and human services is the direction we need to go to put our Commonwealth back on track. The General Assembly knows how to work together to get things done and most recently did just that in order to pass the medical cannabis legislation in the Commonwealth. There was give and take, collaboration and compromise and what came from those discussions was a way to positively impact the lives of people across Pennsylvania. Let those type of negotiations be our template.
In 16-17, we get another bite at the apple, another chance to blend the advocacies of our constituencies with the overall needs of this Commonwealth. There is no doubt that Pennsylvania deserves better than what has transpired over the course of the last year and that partisan politics is never the answer to progress.
ND: What is your position on Governor Wolf’s proposed increase (from .89 to .99) of the bank shares tax in the 2016-2017 budget proposal?
SW: The current state of the Commonwealth budget requires each of us to take a hard look at sources of revenue going forward. Having said that, we must also be cognizant of the unintended consequences of legislative action. Understanding that this is a tax on capital that is retained and not on income, it does not really ever assume earnings or losses. I have reservations with this concept generally and more so with the proposed increase.
Pennsylvania is one of a few states to yet have a banking shares tax and the proposed revenue generation by the increase is almost $40 million. I fear a potential tie to job loss in the industry as an unintended consequence.
I recently read a great quote. “When the solution is simple, God is answering.” I wish that would happen more with respect to our state budget. We must consider any budget proposal comprehensively. Adding new programs or expanding successful programs are often attractive. Conversely, generating additional revenue through new or higher taxes is unpopular. The challenge is to find that middle ground.
I sought to address that dichotomy through Senate Bill 115, a bill that would establish a new type of competitive public-private partnership where qualified outside entities, using privately-invested funds, would address social concerns such as public safety, workforce preparedness, and long-term living services. Their efforts would be validated by an independent third-party against mutually-agreed objective criteria. If the criteria are met, the entity is paid a pre-set fee. If the criteria are not met, the entity is not paid. This way, the Commonwealth only pays for success. By bringing a private-sector approach to some of our more persistent social needs, I believe we can innovate while spending tax dollars more efficiently.
ND: You have a strong background in business and economic development. Tell us about your efforts to establish the Erie Center for Arts and Technology?
SW: I have often said that hopelessness is likely the most damaging symptom of poverty. Why would anyone venture into the darkness if there is no visible light at the end of the tunnel? Bill Strickland, the President & CEO of Manchester Bidwell, made it his mission to impact poverty one student at a time. I met Strickland when I was the Director of Administration for Erie County. It changed me – his vision stuck with me and I knew that this was something I had to help become a reality for the greater Erie community.
I have yet to find a strategy or initiative that has a better return on investment than the Manchester Bidwell model; introducing young people to hope and success through arts education and training/re-training forgotten adults have been proven to break the cycle of poverty. National Centers for Arts & Technology across this country create an empowering educational environment and I am thoroughly convinced that an Erie Center for Arts & Technology will provide high quality outcomes in our community.
This model works. The data leaves no room for question and the outcomes speak for themselves. An Erie Center for Arts & Technology is not the silver bullet for which our community always seems to be searching, but the model is proven to move the needle of poverty. I see Manchester Bidwell in our community as a part of the network of high quality programs and organizations that work in harmony to drive this area forward.
This wasn’t an opportunity that I was going to let pass us by. I helped to recruit some like-minded folks and to establish the Erie Center Steering Committee, which has been interfacing with the National Center staff to gather data and collaborate with existing community organizations in order to develop a blueprint. The Steering Committee recently received the draft blueprint at the end of April and I am really very excited to see this be implemented in our community.
This exclusive interview can be found featured in the May 2016 issue of Transactions. Not a subscriber? Visit the Transactions page on this website or call PACB at 717-231-7447 to start receiving the magazine.