By Alex Baloga, President and CEO, Pennsylvania Food Merchants Association
Spring in Harrisburg always brings big conversations. This year, two stand above the rest for Pennsylvania’s food and beverage industry: the Pennsylvania state budget and swipe fee reform.
Both will shape the operating environment for food retailers across the Commonwealth in very real ways. For an industry operating on narrow margins and high volume, small policy changes can have a significant impact.
Swipe Fee Reform Gains Momentum
For the second consecutive session, the house finance committee has advanced legislation that would prohibit credit card companies from charging interchange fees on the sales tax portion of transactions.
Under the current system, retailers pay swipe fees on the full amount of a credit card purchase, including sales tax dollars. Those funds are collected on behalf of the Commonwealth and passed directly to the state, yet merchants still pay a percentage-based processing fee on that money.
Take a typical $100 grocery transaction. With sales tax included, the total rises, and interchange fees are assessed on the entire amount, not just the portion the retailer retains. That means stores are paying fees on money that goes straight to Harrisburg. Multiply that across thousands of transactions each week and across hundreds of stores, and the impact becomes significant.
HB 2090 offers a focused, practical fix. It ends swipe fees on the sales tax portion of transactions, improves fairness in disputed charges by preventing penalty fees until liability is determined, and protects lawful pricing practices. Enforcement would apply only to payment card networks and would be handled by the Pennsylvania attorney general.
This is about correcting a structural imbalance in a highly concentrated credit card marketplace where two dominant networks control the vast majority of transactions. Swipe fee reform represents one of the most direct ways lawmakers can reduce unnecessary operating costs without increasing state spending. When retailers avoid unnecessary expenses, they can continue investing in employees, stores, technology, and the communities they serve.
Budget Decisions With Real Consequences
This fiscal year, lawmakers are working through a proposed $53.3 billion state budget for fiscal year 2026-27. Budget discussions often focus on top-line numbers, but the details matter deeply for the Food and Beverage Industry.
Funding decisions affect agriculture, workforce development, tax policy, infrastructure, and public safety. Revenue assumptions shape long-term stability. Each component influences the broader food supply chain that supports Pennsylvania communities every day.
Food retailers employ hundreds of thousands of Pennsylvanians and serve as anchors in neighborhoods across the Commonwealth. They support local producers, provide essential goods, and collect and remit billions in tax revenue each year. The industry’s economic footprint is significant, and state policy should reflect that reality.
As budget negotiations move forward, PFMA will continue engaging with lawmakers and administration officials to ensure the perspective of food retailers remains part of the conversation. Thoughtful budgeting and smart policy decisions can reinforce stability for businesses and consumers alike.
Focused Advocacy, Forward Momentum
PFMA’s advocacy this session remains centered on practical outcomes. Swipe fee reform is a clear example of targeted policy that delivers relief. Budget decisions present an opportunity to invest strategically and support industries that serve every community in Pennsylvania. This is an active and consequential period in Harrisburg. PFMA will remain fully engaged, working with leaders in both chambers to advance policies that promote fairness, stability, and long-term growth.
The goal is straightforward: a policy environment that allows Pennsylvania food retailers to remain strong, competitive, and ready to meet the needs of the communities they serve.
