One Year Later Change Is Happening in Pennsylvania

Bruce Katz and
Bruce Katz Founding Director of the Nowak Metro Finance Lab - Drexel University
Mark Muro

December 19, 2004

Washington—When we first began working on our big report “Back to Prosperity” three years ago, we were warned that Pennsylvania was a tough nut to crack.

Pennsylvanians don’t do reform, we were told, even as we suggested the state was barely growing, losing in the global economic wars, and watching haphazard development hollow out its cities and towns.

Nothing will change, we were assured.

Politics always trumps policy, we heard.

And so it sometimes seemed: As we traveled the state talking to township supervisors and small-city mayors, business people and developers, we encountered a lot of pessimism about the Commonwealth’s ability to turn itself around.

We heard how the state’s weak planning systems and uncoordinated agendas make it nearly impossible to project a better future.

We heard how the constant cross-purposes of thousands of municipalities, hundreds of interest groups, and the state’s own agencies stymie reform.

And sometimes we sensed real hopelessness about whether the state would be able to renew itself by asserting a new economic vision, focusing its spending and decisionmaking, and working out a more streamlined way for regions to govern themselves and deliver key services.

For those reasons, we were under no illusions about the difficulty of making an impact when it came time to release our report on Pennsylvania’s troubling economic and development trends last December.

Well, what a difference a year makes.

One year after we released our report, we here at Brookings have grown optimistic about the prospects for change in Pennsylvania and believe others too are growing hopeful.

Even having been around a while now, even having worked all over the country, we are more convinced than ever that the Commonwealth may soon leverage its unique set of competitive advantages to build a new prosperity vibrant with bustling towns and cities, good-paying jobs, and healthy rural areas.

Why are we so upbeat?

In part, of course, our optimism stems from the warm reception Pennsylvanians have afforded our tough report.

More than two dozen newspapers all over the state ran page-one stories on our research last December, and many of them outdid themselves with editorials endorsing our challenge to the state.

Since then, numerous papers have dug deeper, investing significant effort in probing such critical problems as the state’s fragmented local governance and its history of haphazard investments.

Beyond that, we have been gratified by Harrisburg’s response to our report’s depiction of how the state is growing—or not growing.

Legislators on both sides of the aisle have heard us out. Key Republican leaders—and not just Democrats—have read “Back to Prosperity,” and now several bills are circulating. One, introduced by Rep. Dave Argall, the House Majority whip, would create a commission to review the state’s economic development strategies. Another, introduced by Rep. John Yudichak, D—Luzerne County, would create a panel to reassess the state’s flawed local government framework.

Even more encouragingly, the governor and his cabinet—rather than burying a document that advanced a tall order of reforms—have owned up to many of our criticisms of past state policy and begun to take action.

PennDOT dropped or put on hold 26 major bridge and highway projects last spring, conserving $5 billion for rehabilitating existing roads or investments in higher-priority projects. A new Economic Development Cabinet has been created to work with a revitalized Interagency Land Use Team to better focus the state’s actions and investments. And recently, Gov. Rendell revived the moribund State Planning Board, asking it to make recommendations on how better to manage development and local government.

Sure, there’s much more to do, especially on modernizing local government and subordinating an often-chaotic tradition of investing to a true economic vision. For example, it remains an open question as to how the state can ensure that the massive subsidy flows of the governor’s $2.3 billion stimulus package will support sensible, high-quality development projects rather than ad hoc ones. And the same goes for the question of how the state’s Act 47 program for aiding fiscally distressed cities can be made into something more than a Band-Aid for deeper tax and governance problems.

Still, the fact remains: We believe Pennsylvania’s initial reforms this year are impressive.

Yet more than just newspaper clippings and policy tweaks in Harrisburg make us hopeful this winter.

Far more important, we are struck by the extent to which Pennsylvanians have taken to heart the need to focus in their regions and begin forging a new consensus for revitalization.

All along we’ve maintained that Pennsylvania has an outstanding potential to catalyze growth because it possesses outstanding assets: distinctive, human-scaled towns, cities, and boroughs; superb natural resources and rural areas; top-flight universities and hospitals; an unusually committed, rooted citizenry.

However, it has also seemed to us that neither the Commonwealth nor its regions have been able to harness these strengths through effective collaboration.

Yet now look: Suddenly urgent dialogue is breaking out all over the state.

More than 40 times this year one or another of us at Brookings has driven or flown to Scranton or Centre County or Greensburg or Harrisburg to speak to one or another of the dozens of forums state and local leaders have held to consider what we had to say.

Some of these engagements were briefings for state membership associations—the county commissioners, the hospital administrators, the Chamber of Business and Industry, the planners, the township supervisors—that believed it worth their while to ponder the Brookings report. More of them were talks in the dozen or so regions that are now holding structured, optimistic conversations about how to link their particular interests to a sustained statewide campaign for boosting the state’s economic competitiveness and quality-of-life.

On these trips, we learned that rural and urban residents of Berks Co. and the Lehigh Valley and York and Westmoreland Co. are organizing themselves to move the state beyond the usual partisan stalemates.

To that extent, the “Brookings report” no longer belongs to us: It has been adopted by Pennsylvanians and taken on a life of its own. New leaders are standing up. New ideas for reform have emerged, including fresh ideas on updating the Commonwealth’s outdated tax systems.

In sum, there has been solid progress this year. A new sense of common cause is palpable. Traditionally parochial regions are looking outward. A new sense of urgency and optimism provides the basic infrastructure necessary for fundamental reforms in the long-term.

As to the future, none of this means the anyone can rest on their laurels. Far from it: Much tough policy work lies ahead, and the jury is out as to whether the regions’ new energy will be able to overcome the state’s proud penchant for partisanship and turfism.

And yet, even here we’re upbeat. And we’re not alone: Leaders from other states—Michigan, Maine, Massachusetts, Ohio—have been observing the momentum in Pennsylvania and wondering how to replicate it.

In that fashion, we sense a happy irony in the offing: Could it really be that tough, grid-locked Pennsylvania is going to emerge as a model of revival for all the Rust Belt states?

Given what we’ve seen and learned, we think it might.