Re­port: Pa. among worst-run states

The Review - - FRONT PAGE - By Dave Le­mery Watch­

When Penn­syl­va­nia gets rated highly for the gen­eros­ity of its res­i­dents or rated poorly for the size of its pen­sion debt, there are hard num­bers that can be looked at to make such judg­ments.

But when it comes to judg­ing how well a state gov­ern­ment is per­form­ing, that’s a more neb­u­lous un­der­tak­ing. Nev­er­the­less, fi­nan­cial in­for­ma­tion web­site 24/7 Wall St. has at­tempted to do just that, com­pil­ing data on un­em­ploy­ment rates, pen­sions, GDP growth, poverty rates and the states’ credit rat­ings to put to­gether a rank­ing of all 50 states.

After putting all those var­ied num­bers to­gether, study au­thor Sa­muel Steb­bins came to the con­clu­sion that Penn­syl­va­nia is the 36th-best run state in the na­tion. Put an­other way, that makes it the 15th-worst run state.

Steb­bins, in pub­lish­ing his re­sults, ac­knowl­edged that there are some draw­backs to as­so­ci­at­ing the spe­cific data points he used with the qual­ity of any given state gov­ern­ment.

“It is im­por­tant to note that cur­rent eco­nomic and so­cial con­di­tions in a given state are of­ten not the re­sult of the work of sit­ting elected of­fi­cials,” he wrote. “High-level gov­ern­ing strate­gies and bud­get pri­or­i­ties can have con­se­quences that ex­tend far be­yond the ten­ure of those who make them.”

Re­gard­less, there’s no deny­ing that Penn­syl­va­nia isn’t do­ing great in sev­eral of the cat­e­gories that the re­port looked at.

Penn­syl­va­nia was tied for 40th with a 4.9 per­cent un­em­ploy­ment rate, more than dou­ble Hawaii’s na­tion-lead­ing rate of 2.4 per­cent. When it comes to the per­cent­age of its pen­sion obli­ga­tions that are funded, the state was ranked 44th best at just 52.6 per­cent; topranked Wis­con­sin was 99.1 per­cent funded.

Things were slightly bet­ter, though still not too im­pres­sive, when it comes to GDP growth, where Penn­syl­va­nia was tied for 15th best at 2.2 per­cent, while Wash­ing­ton state had more than

dou­ble that amount at 4.7 per­cent. For poverty rate, the state was tied for 22nd best at 12.5 per­cent, al­most five points worse than New Hamp­shire’s first-place mark of 7.7 per­cent.

When it comes to credit rat­ings, only Illi­nois, Con­necti­cut and New Jersey were judged to be worse than Penn­syl­va­nia’s Aa3 score from Moody’s.

“After Rhode Is­land and neigh­bor­ing New Jersey, Penn­syl­va­nia ranks as the worst run state in the North­east,” Steb­bins wrote. “Penn­syl­va­nia has enough money set aside to meet only about half its to­tal pen­sion obli­ga­tions, a far smaller share than most states.”

The re­port noted that Penn­syl­va­nia doesn’t cur­rently have any money set aside in its rainy day fund, though it noted that the 2018-19 bud­get pro­vides for some funds to be de­posited.

Over­all, Ore­gon was judged to be the best-run state, while Louisiana landed in last place in the com­bined rank­ings.

The non­profit Com­mon­wealth Foun­da­tion has ar­gued for some time that leg­is­la­tion lim­it­ing gov­ern­ment spend­ing would be a good start for Penn­syl­va­nia to be­gin to ad­dress is­sues like those noted in the 24/7 Wall St. re­port.

“The 2019-2020 Gen­eral As­sem­bly has a chance to im­ple­ment spend­ing re­straint by pass­ing the Tax­payer Pro­tec­tion Act, which passed the state House last year,” the foun­da­tion’s El­iz­a­beth Stelle wrote re­cently. “In ad­di­tion, state law­mak­ers should pur­sue com­pre­hen­sive tax re­lief, im­i­tat­ing the suc­cess of North Carolina where spend­ing con­trols and tax re­lief re­sulted in ro­bust eco­nomic growth and bud­get sur­pluses. If spend­ing lim­its had been en­acted in 2003, the state would cur­rently be spend­ing $2 bil­lion less with no talk of bud­get deficits. And the av­er­age fam­ily of four would have $10,000 more in their pock­ets.”

The pro­posed Tax­payer Pro­tec­tion Act would use the three-year rates of in­fla­tion and pop­u­la­tion growth to put a strict cap on how much gov­ern­ment spend­ing could in­crease in any sin­gle year.

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