Pennsylvania

Economic Forecast Bleak for Pennsylvania

Policy

If policymakers in Harrisburg don’t act upon their constituents’ desire for lower taxes and economic freedom, then Pennsylvanians shouldn’t expect to be more prosperous anytime soon, according to the seventh edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.

The report is published annually by the not-for-profit American Legislative Exchange Council (ALEC), America’s largest non-partisan, voluntary membership organization of state legislators. Its authors are Dr. Arthur Laffer, a former economic advisor for President Reagan and creator of the Laffer Curve (an illustration of the theory that there exists a tax rate that generates maximum revenue); Stephen Moore, editorial writer for the Wall Street Journal and chief economist for the Heritage Foundation; and Jonathan Williams, an author and recipient of the Ludwig von Mises Award in Economics.

The analysis’ Economic Outlook Ranking is a forecast for the states based on their current standing in 15 equally weighted policy variables, such as workers’ compensation costs, minimum wage, death tax rates, property and sales tax burdens, and right-to-work status. Pennsylvania came in at a dismal 33, just a notch higher than last year’s showing of 34. Once again, the economic forecast is bleak, and Pennsylvanians are left with the consolation that some of its neighbors scored even worse – New York is dead last at 50, New Jersey scored 45, and Maryland stands at 34.

But certainly taxpayers’ expectations were a good bit higher, given that in 2010 they gave the Republican Party a sweeping mandate to act upon its stated mission to lighten the tax burden and create jobs. In fact, of states that are totally “red”—i.e., Republicans control all elected branches of state government—only Nebraska (35) and Montana (43) scored worse than Pennsylvania.  Several states that went totally red in the 2009-2010 Tea Party-led voter revolution saw significant improvement in their Economic Outlook rankings. Wisconsin shot up 17 spots from 32 in 2013 to 15 in 2013. Michigan sprang from 20 in 2013 to 12 in 2014.

“Labor unions are still the most entrenched special interest in Harrisburg,” said Leo Knepper, executive director of Citizens Alliance of Pennsylvania (CAP). “What too many policymakers don’t understand is that good policy is good politics. They think that pandering to Big Labor is the key to maintaining political control, when in fact cutting taxes and unfettering economic opportunity are the keys to lasting electoral success.”

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