Faster Permits—Or Your Money Back? It Worked in Pennsylvania.

Competition for jobs and investment is pushing states to fix what Washington won’t.

Courtesy Katherine McAdoo/Unsplash.

Several years ago, Pennsylvania had a permitting problem. Thousands of applications for building permits and environmental approvals sat in bureaucratic limbo. The state’s Department of Environmental Protection alone carried a backlog of more than 2,400 permits—many of them required before construction could begin on housing, factories, energy projects, and other infrastructure.

The dysfunction extended beyond development. Pennsylvania also had some of the longest wait times in the country for issuing nursing licenses. That forced qualified workers to wait months, or leave the state entirely, before they could start work.

Then Pennsylvania tried something different. It promised to issue new permits quickly—or give applicants their money back.

Under a program dubbed “PAyback,” agencies were required to publish firm review timelines. If they missed their deadline, applicants would receive a full refund of their permit fee. The initiative was part of a broader push by Governor Josh Shapiro to modernize the state’s permitting procedures and “keep Pennsylvania moving at the speed of business.” Since its launch, the state has slashed backlogs and dramatically shortened approval times.

At a moment when federal permitting reform remains stalled in Washington, Pennsylvania is demonstrating how states can streamline regulatory processes without sacrificing environmental standards while improving service delivery to residents and businesses. Clear deadlines, transparency, and accountability can change bureaucratic behavior. Other states should take notice.

The results of Pennsylvania’s experiment have been impressive. Since 2023, average processing times for business filings in Pennsylvania dropped from 14 days to one. Doctors’ licenses went from 43 days to five. Pharmacist licenses fell from 20 days to four. Nursing licenses that took months are now issued in just six days.

Faster processing meant agencies could finally eliminate backlogs. Last fall, the Department of Environmental Protection announced that it had eliminated its longstanding permit backlog entirely.

Ironically, because of this success, the refund provision has barely been used. Since PAyback launched, the state has issued just five refunds, according to recent data. The possibility of issuing refunds created a credible performance commitment. Agencies now have a clear incentive to meet deadlines—and visible consequences if they do not.

As public-administration scholar Donald Moynihan observed in a case study of the reforms, the success stemmed not from a “vague governmentwide performance initiative,” but from targeting specific bottlenecks. “The targets were public, which motivated personnel to meet them, created accountability, and made it easy to communicate progress to the public and stakeholders,” Moynihan writes. This transparency made the deadlines real and effective.

The refund guarantee, though headline-grabbing, was one part of a larger permit modernization effort. Shapiro’s administration pursued a suite of reforms that paired accountability with broader structural changes. That began with a comprehensive audit of every permit, license, and certification issued by state agencies. The Department of Environmental Protection alone identified 784 unique permits or licenses. Across all state agencies, the total came to 2,482 separate government approvals. Before the audit, no centralized inventory existed.

From there, Pennsylvania established formal permit “shot clocks,” requiring agencies to define and publish standard processing times for each type of application. An online permitting dashboard now allows users to track applications in real time rather than calling agency offices for updates. The administration also launched an Office of Transformation and Opportunity—a one-stop shop for businesses seeking to expand in Pennsylvania, designed to navigate what had previously been a maze of overlapping agencies and requirements.

Another noteworthy reform was the SPEED program, which allows applicants to pay for qualified third-party professionals to conduct initial technical permit reviews, with agency staff still responsible for the final sign-off. In practice, developers can move to the front of the line by bringing in private expertise to supplement government capacity. Rather than waiting for government to hire its way out of a backlog, the state allowed the private sector to help clear it.

The economic payoff of these policies has been tangible. Last summer, Amazon announced it would invest at least $20 billion to build multiple AI infrastructure campuses in Pennsylvania—the largest private-sector capital investment in the state’s history. The decision underscores what is at stake in the permitting debate: Businesses decide where to invest partly based on regulatory certainty and speed. Pennsylvania’s permitting reforms strengthened its competitive position.

That competitive dimension is critical. States operate in a federal system where residents and businesses can vote with their feet. They compete for jobs, tax base, and investment. Unlike Washington, they feel the immediate economic consequences of bureaucratic delay.

Other states are beginning to follow suit. Last month, New Jersey Governor Mikie Sherrill signed an executive order launching a similar set of reforms, including a permit inventory, public dashboards, processing deadlines, and the creation of a “regulatory simplification team.” Legislators in Iowa have recently proposed similar permit transparency measures. Even states long associated with regulatory paralysis, such as New York and California, are reexamining their environmental review systems in the face of housing shortages and infrastructure bottlenecks.

The federal government, meanwhile, remains largely stuck. Congressional debates over permitting reform continue to stall amid disputes over which energy sources should receive faster approvals and which environmental reviews must remain untouched. States don’t have the luxury of that kind of paralysis.

Pennsylvania went from one of the worst permitting environments in the country to one of the best. As other states are now reconsidering their permitting and environmental review processes, they’d do well to study its success.