High Spending Holds Pennsylvania’s Economy Back

Pennsylvania holds steady in Fraser Institute’s annual report on economic freedom with a middling score of 18..Pennsylvania continues to outperform its neighbors when it comes to controlling spending, limiting taxation and labor market reforms, but overall our score is trending downward since the first report in 2003.

Pennsylvania’s most obvious barrier to opportunity is reckless government spending. Of the three categories, the spending ranking is the worst at 24. Given that state spending has grown faster than Pennsylvania’s economy for more than a decade, this comes as little surprise. High entitlement and corporate welfare spending is especially troubling for the future.

Pennsylvania’s attempts to address its spending problem with more taxes shows through with a taxation ranking of 20. Our tax burden is especially high. Pennsylvania’s income and payroll tax as a percentage of Income is the 11th highest in the nation.

Less economic freedom isn’t just a problem for the commonwealth’s fiscal stability. According to the report, the least-free states have a per capita income 5 percent below the national average, compared to 7 percent above the average for the most-free states.

As freedom increases, opportunities grow and states attract jobs and new residents.  

Pennsylvania has a choice to make. It can continue to embrace the tax, spend and regulate approach of neighbors like New York and New Jersey, or it could join states like Texas, Florida, and New Hampshire in embracing freedom by controlling the growth of state government.

Measures like the Taxpayer Protection Act would control the state’s runaway spending. Reforms to our liquor monopoly, welfare programs, and education choice, would also bring new opportunities to the people of the commonwealth.

Pennsylvania has tremendous potential, but unleashing that opportunity will require discarding the tax and spend policies of the past.