An intimidating budget shortfall this year and next has state leaders calling for a change to the status quo. That is: surging state spending. Governor Wolf is pulling back on corporate welfare programs, like Keystone Opportunity Zone tax breaks, while legislative leaders have called for “restructuring” state government. The economic evidence backs this up.
This year's Economic Freedom of North America report from the Fraser Institute shows Pennsylvania's record high spending is undeniably linked with less economic opportunity.
The state ranks a disappointing 30th when it comes to controlling state spending and an abysmal 37th in income and payroll tax revenue as a percent of personal income. In other words, Pennsylvanians have seen their tax burden increase and economic opportunity decrease as state debt and state spending continues to climb.
Overall, this year's index, including data from 1984 to 2014, ranks Pennsylvania 18th among the states.
The report emphasizes a lesson Pennsylvania desperately needs to learn: Unrestrained government spending doesn’t create economic growth—it kills it. But responsible spending growth will allow lawmakers to ease the tax burden for everyone. That’s how you create an environment of opportunity and economic growth for all Pennsylvanians