December 2, 2019
The Center Square
With expenses outpacing income, Pennsylvania is one of eight states across the country running a deficit within its government operations, according to a recent analysis.
In its report, “A Snapshot of Each State’s Financial Health,” cost information website HowMuch.net examined the amount each state government is spending, compared to the amount coming in through taxes and other sources.
The analysis was based on 2017 figures – the same year the new U.S. tax code was enacted.
According to its analysis, gleaned from such sources as U.S. Census data, researchers concluded Pennsylvania’s state government expenses outpaced its revenues 0.63 percent, resulting in the deficit.
Per-capita expenses in 2017 hit $8,100, while revenue from the year clocked in $8,000, per capita.
Pennsylvania’s greatest expense, per capita, was under the category, “employees, supplies and service payments.” It represented more than half – $4,400 – of the state’s spending, per capita.
On the revenue side, the greatest contributor to Pennsylvania’s revenue, property taxes, made up $3,000 of the $8,000, per capita, of income that is funneled into the state’s operations.
Pennsylvania’s per-capita intake of taxes was above the national average, which hovered around $2,500. Vermont recorded the highest amount of taxes, per-capita, in income, at $5,000. On the low end, Alaska brought in $1,600.
Pennsylvania's budgetary practices have come under frequent criticism from the nonprofit Commonwealth Foundation, a free-market-oriented think tank, and from conservative lawmakers who have pushed for the passage of the Taxpayer Protection Act. The legislation would put strict limits on how much the state government can increase expenditures each year based on population growth and inflation.
"The TPA controls government spending by limiting how quickly it can grow," the foundation's Tirzah Duren said in a recent analysis. "It keeps spending growth in line with economic growth, freeing up revenues for paying down debt."
The HowMuch.net analysis comes at a time when deficit spending in the federal government reached a record – to the tune of $23 trillion.
In a statement within the report, author Juan Carlos said the review could play an important role in next year’s presidential election.
“With November 2020 on the horizon, questions about government debt, tax rates and the expansion of social programs will be at the forefront of national conversation,” Carlos wrote in the report.
Depending on a candidate’s platform, Carlos said in the report the outcome of next year’s election could impact states’ debt levels in the road ahead.
Most of Pennsylvania’s neighbors fared better in the How Much analysis. Only one other neighboring state – Delaware – spent more than it took in during the year under review.
Other states with budgetary deficits, according to the report, included Alabama, Alaska, Colorado, Kentucky, Vermont and Wyoming.
Nevada led off the states notching the highest surpluses, according to the analysis, with 27.65 percent, followed by Hawaii, Idaho, North Carolina and, at 15.5 percent, New Hampshire.