Pennsylvania Must Speed Up Reforms to Prosper: Growth Remains Slow Despite Hint of Progress

Amy Liu,
Amy Liu Headshot
Amy Liu Senior Fellow and Co-Director - Metropolitan Policy Program

Mark Muro, and Rebecca Sohmer
Rebecca Sohmer Senior Research Analyst

April 8, 2007

So how is Pennsylvania doing?

Is the commonwealth moving at last toward vitality?

Three years after our group at the Brookings Institution Metropolitan Policy Program released its 2003 report “Back to Prosperity,” the answer to that question is mixed.

Pennsylvania is at once the same and different today, as we suggest in a just-released update of our earlier report.

And for that reason, we believe the time has come for state government—especially the General Assembly—to commit to deep-going reforms that will build on the visible beginnings of change in Pennsylvania and so begin altering a system that remains too much the same.

“Back to Prosperity” proposed a strong new vision of how Pennsylvania might excel in the global economy by revitalizing its cities, towns and regions, yet for all that, the tough challenges identified in the first report still exist.

The state remains one of the slowest-growing in the nation (although in 2003 to 2005, the state enjoyed a net in-migration of nearly 10,000 people after years of outflow).

Cities and boroughs continue to lose population as households move into previously undeveloped outlying communities (although here, too, signs of life can be found in an uptick in new housing construction and rehabilitation in many older communities).

For that matter, the commonwealth’s nonfarm employment grew by just 1.1 percent, compared with the nation’s 3.3 percent growth during the years 2000-2006 (though even here, the state’s rank among states improved from 45th in the 1990s to 37th in this decade).

The bottom line: The same trends of slow growth, “hollowing” metropolitan and rural areas, and deindustrialization that have gripped the state for decades still do today and require urgent, possibly radical responses.

Yet much has changed in the last three years, which is why we remain optimistic about the state’s ability to make headway on its pursuit of prosperity.

Thoughtful debates have begun in Pennsylvania regions over how best to update the local governance system to empower municipalities to innovate in pursuing greater efficiency and fiscal strength.

State agencies are spending tax dollars more strategically and working to align community development, economic development and transportation investment with a new, place-oriented vision of economic success.

Public opinion has shifted. Voters are now strongly supportive of common-sense thinking on such key issues as empowering local government and concentrating investment in existing communities, according to recent polling.

The dozens of regional leaders we met with in a number of “listening sessions” in the last year frequently expressed impatience with the pace of change and expressed determination to make change themselves, if need be.

Even so, the starkness of the state’s predicament underscores that these welcome developments represent only a beginning.

What is needed now, early in a strong governor’s second term, with a new Legislature in place, is a recommitment to the hard work of institutionalizing truly systemic reform that will result in sustained progress.

To that end, we urge the General Assembly to join the Rendell administration in bearing down on three crucial reform priorities that we think offer promise for revitalizing the state by bolstering its urban and rural economies and quality of place:

  • Empower local governments to better manage change, combat fiscal distress and invest in the future. Through its revival of the State Planning Board, the Rendell administration has done a good job engaging a diversity of stakeholders in mapping out a reasonable path toward substantial governance and planning reform. Now the General Assembly should embrace key elements of that agenda by enacting legal changes to make it much easier for local governments to collaborate with their neighbors, re-engineer the way they deliver services, provide amenities and raise revenue in a way that is more equitable and sustainable. Action along these lines will be essential to offering the attractive quality of life needed if Pennsylvania is to retain and attract top firms and workers.
  • Continue making reinvestment a priority. The Rendell administration has launched a nationally significant drive—epitomized by its Keystone Principles for Growth, Investment and Resource Conservation—to prioritize investment in existing communities and existing infrastructure and so make good use of the taxpayers’ money. Still, much work remains to further institutionalize these spending criteria, link transportation investment to land-use planning and rein in haphazard water and sewer development to channel growth into existing communities.
  • Continue building a competitive economy through strategic investment in key clusters and complementary workforce development. The state has finally taken important steps to develop a clear long-range plan for diversifying its transitioning economy, fostering promising industrial clusters, and “tuning” the workforce training system to the needs of those clusters. Now the state needs to go further in supporting the emergence of promising regional clusters, making sure its workforce system supports itself.

The time has come to go deeper, at a time when the recent legislative shake-ups in Harrisburg show voters are no longer so tolerant of business as usual.

Change has begun in Pennsylvania, but now the state needs to summon the will to enact the deeper reforms that will in time yield a more prosperous future for all Pennsylvanians.