Total Cost of Pennsylvania State & Local Government

Executive Summary

The total cost of state and local government in Pennsylvania reached an estimated $108.3 billion in FY 2005-06, and will likely exceed $130 billion by FY 2010-11 (by conservative projections). The current state and local government levels of spending represent an increase of 105%—more than double the concurrent estimated combined rates of inflation and population growth (47.4%)—from the FY 1991-92 level of $52.8 billion.

For every man, woman, and child in Pennsylvania, state and local government expenditures rose by 98.2%, from $4,384 in FY 1991-92 to an estimated $8,690 in FY 2005-06—a rate more than double the concurrent inflation rate of 44%. For FY 2005-06, the estimated per-capita cost of state government was $4,312, and the estimated per-capita cost of local government was $4,378.

During the first three years of the Rendell Administration (between FY 2002-03 and FY 2005-06), the cost of state government increased by an estimated $586 for every man, woman, and child in Pennsylvania, or $2,344 per family of four—a 15.7% increase. During the same time period, local government spending increased by an estimated $680 per capita, or $2,720 per family of four—an 18.4% increase.

If state and local government spending had been limited to the previous year’s combined rate of inflation and population growth between FY 1991-92 and FY 2005-06, the amount each Pennsylvanian paid for state and local government today would be $2,400 less today ($6,290 per person, rather than the actual state and local government price tag of $8,690 per capita—$34,760 per family of four).

The rapid increases in state and local government spending demonstrate the need to constitutionally limit the annual growth in how government can spend each year. Without incorporating greater fiscal restraint in the budgeting process, government spending will continue to outpace citizens’ ability to pay.

###

The policy brief Total Cost of Pennsylvania State & Local Government: 2005-06 and Beyond can be accessed here (PDF, 815KB).