Pennsylvania’s Poor Showings Aren’t Permanent

The commonwealth continues to score poorly in 24/7 Wall St.’s list of the nation’s best-and worst-run states, ranking 42nd right between neighbors West Virginia and New Jersey.

Put differently, Pennsylvania is the 9th worst-run state in the nation.

The state index assesses each state’s financial health based on debt per capita, a state's unemployment picture, bond rating, and poverty rate.

The index puts Pennsylvania’s debt per citizen at $3,716 or the 20th highest among all states. This figure does not include local debt or state pension debt. The unemployment rate remains above the national average and constant budget deficits caused by overspending have led S&P to threaten Pennsylvania with a credit downgrade. Keep in mind Pennsylvania's current S&P credit rating of AA- is already one of the lowest in the nation.

Despite soaring human services spending the state remains in the middle of the pack on poverty with a 13.2% poverty rate, which is the 21st lowest.

This ranking is far from an outlier. The Mercatus Center ranks Pennsylvania a dismal 45th place in their assessment of state fiscal health. For starters, Pennsylvania does not have enough cash assets to cover its short-term liabilities. And its budget fails to generate enough revenue to match expenses. Pennsylvania’s rank is driven down further by low performance in long-term measures of fiscal health due to its large pension liabilities.

Harrisburg’s spending addiction is the root of these problems. Our economic growth has been stunted by years of surging spending and mismanagement of tax dollars. This trend has continued with the state skirting even constitutional requirements by letting an appropriations bill become law without the revenues to balance it. Meanwhile, Gov. Wolf continues to call for tax hikes to reduce the budget deficit, further imperiling economic growth.

Without transformative changes to the areas driving spending growth, such as welfare reform, Pennsylvania will continue to disappoint in future assessments of state economic and fiscal health.