Redesigning state government has never been more important. For evidence, check out Pennsylvania’s poor performance in U.S. News & World Report’s recent Best States Rankings. Overall, the study puts the Keystone State in an unimpressive 30th place.
The commonwealth’s individual rankings in the “government” and “economy” categories are even worse.
In the government category, Pennsylvania ranked 36th. The metrics embedded in this ranking are fiscal stability (40th), government digitalization (11th—our only bright spot), budget transparency (29th), and state integrity (45th).
When it comes to the economy, Pennsylvania ranked a lackluster 39th. The factors driving this ranking are closely related to the size of government: growth (22nd), employment (44th), and business environment (40th).
Few Pennsylvanians who follow state politics or do business in the state will be surprised to learn about these poor rankings. We’ve seen government grow, jobs leave, and the business climate become less friendly over the past 40+ years.
An avalanche of government regulations, high taxes, and a culture of corporate welfare have stifled business opportunities and limited economic growth. Yet, despite these challenges, the state is making progress.
For example, Governor Wolf recently signed historic pension reform legislation that begins to move the state’s retirement systems in a sustainable direction while limiting the accumulation of more debt. The Pew Charitable Trusts called this bi-partisan legislation, coupled with changes made in 2010, “a major turn-around among states.”
There's also hope on the budget front. Earlier this year the governor released a budget that contained some cost-cutting measures and steps towards increased government efficiency. He also dropped his previous proposals to raise income and sales tax rates. Unfortunately, he is still calling for $1 billion in additional taxes aimed at specific industries.
Fortunately, House Republicans rejected the governor’s plan and released a more promising budget proposal. In addition to no tax increases, their plan keeps spending in line with the proposed Taxpayer Protection Act and reduces corporate welfare by more than $56 million.
By reforming government spending drivers like pensions, welfare, education and corrections, Pennsylvania can reduce the tax burden and reinvigorate our economy.