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Protect taxpayers and fix Pennsylvania's brain drain: Steve Bloom

Posted 12/4/19

It’s a lovely family reunion. Dad and Mom — now Grandpa and Grandma — sit facing their kids, and their kids’ kids, reminiscing about old times and laughing about the trials of …

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Protect taxpayers and fix Pennsylvania's brain drain: Steve Bloom

Posted

It’s a lovely family reunion. Dad and Mom — now Grandpa and Grandma — sit facing their kids, and their kids’ kids, reminiscing about old times and laughing about the trials of parenting.

Then, in mid-sentence, Grandpa stutters and freezes — his face replaced by an hourglass on a black screen.

Video chat is down again.

It’s an experience shared by tens of thousands of Pennsylvania families — including myself — whose adult children now live out of state. Technology and frequent-flyer miles can bridge our communication gap somewhat, but two of my three children now reside outside of the state. That can be tough.

A big reason many Pennsylvania families are experiencing these kinds of long-distance gaps? The next generation is looking for opportunity and finding it elsewhere.

In 2016, Pennsylvania lost around 260,000 residents in a single year of interstate migration — the eighth-highest level in the country. It’s a “brain drain” especially acute among college-educated millennials.

In the last six years, our state lost nearly 32,000 college-educated individuals between age 18 and 34. They’re moving from high-tax states to low-tax states, and Pennsylvania is on the wrong side of the equation.

The good news? We can turn this around by controlling the growth of state government spending that’s driving up taxes and stifling innovation and entrepreneurship.

In fact, a 2019 statewide poll of Pennsylvania likely voters showed universal support for common-sense limits on state spending growth: Republicans, Democrats and independents each reported at least 67 percent support for the measure.

Another recent poll showed Pennsylvanians think taxes are the most important issue facing the state — more important than immigration, education, crime and health care. They’re right to be concerned.

Since 1970, state spending has increased 48 out of 49 years — more than tripling in that time, while our population has grown by just 10 percent. We face a $1 billion deficit every year for the next five years, according to a recent report by Pennsylvania’s Independent Fiscal Office.

Someone has to pay that bill, and Pennsylvania already has one of the highest tax burdens in the country, averaging nearly $4,600 in state and local taxes per person.

It’s no wonder educated young people are leaving: the Keystone State is 45th in both job growth and income growth since 2001. And we’re the fifth-worst state to start a business, according to Wallethub. Why would a Penn State or Carnegie Mellon graduate want to start their career in a place with such steep economic hills?

More protections against overspending are exactly what Pennsylvania needs.

That’s why fiscal conservatives in the state House and Senate are proposing a constitutional amendment, called the Taxpayer Protection Act, to do just that. House Bill 1316, sponsored by Rep. Ryan Warner, R-Westmoreland County, and Senate Bill 116, sponsored by Sen. Camera Bartolotta, R-Washington County, would limit spending increases to the rate of inflation plus population growth. This ensures spending doesn’t grow faster than families’ ability to pay.

House Majority Leader Bryan Cutler, R-Lancaster County, who supports the measure, says, “Reasonable spending limits will allow state government to grow at a sustainable rate and help prevent deficits that lead to tax increases or borrowing.”

He’s right — states that limit spending growth maintain a relatively low tax burden, which is critical to growth. Those are the states beating Pennsylvania and draining our best and brightest. Enacting the TPA will stem the need for state government to hike taxes and provide an opportunity for economy-boosting tax cuts.

The TPA does not require cuts in spending, just caps. In rare cases of emergency — a natural disaster or severe economic downturn, for example — caps can be exceeded, but only through a supermajority of the General Assembly.

Pennsylvania can once again become a destination state for job creators and job seekers.  Then, college graduates won’t have to go looking elsewhere to launch their careers, and so many families won’t have to FaceTime or Skype to catch up. But it all starts with ensuring state government spends within taxpayers’ means.

Steve Bloom, a former state representative, is vice president of the Commonwealth Foundation (commonwealthfoundation.org), Pennsylvania’s free-market think tank.