• Warnock Associates, LLC

Facing the Future

Updated: Nov 21, 2018

This is the first part in a series about what data reveals are real issues facing Pennsylvania in 2018.

Far away from the rhetoric of the political campaigns is the reality of Pennsylvania today.

Different words can be used to describe it, depending on where your finger lands on a map when you break the Commonwealth into its component parts — its 67 counties.

Carnegie Mellon Professor Robert Strauss sounds more like a meteorologist than an economist when he described the state of the state: “Rainy, overcast, patches of sunshine,” he said. “How much else remains to be seen.”

Here is what a weather map of Pennsylvania would show: mostly sunny in the southeast and in counties in the lower portions of Central Pennsylvania. The clouds roll in as we head west. Then comes the rain — at times a fierce, pounding downfall.

Analogies and anecdotes are fine, but it’s better to look at the numbers, to step away from the partisan fray and look at some of the underlying trends that will shape the state’s future.

The goal was not to measure one county against the other — it is no surprise that Montgomery County is far more affluent than Philadelphia. The question was: How many counties met, exceeded or fell below the statewide average in five key indicators?

Sources: Employment Data - U.S. Bureau of Labor Statistics Real Estate Prices - State Tax Equalization Board Population- U.S. Census 2017 estimate Poverty - U.S. Census, American Community Survey 5-Year Median Household Income - U.S. Census, ACS 5-Year

When it comes to jobs, population, poverty levels and household income Pennsylvania underwhelms. The chart above shows how the state performed in the periods reviewed.

With the help of statistician Scott Lohbauer, point values were assigned to each category. The best a county could score in any one of them was a 5, meaning it far exceeded the benchmark averages; zero indicated failure. (None got a zero.) and 2.5 points means it the county matched the state average in if it matched the state average. The numbers were then added to get a single score.

The highest score a county could get would be a 25; if you matched the state averages your county would get a 12.5. The lowest score recorded was a 3.2. Next, the cumulative scores were ranked from high to low.

The map below shows the split. A list of each county’s score and rank appears below.

There are stories behind each number: which counties are prospering and growing, which are holding steady and which are in decline.

First the good news: There were seven counties that far exceeded the state average: Chester County was No. 1 with a score of 22.1. Four of the seven are the suburban-collar counties that border Philadelphia.

In the second tier, another 18 counties were stable and were clustered around the statewide value of 12.5. An important member of this group is Allegheny County, the home of the City of Pittsburgh, which has emerged at last into the new economy.

Get an umbrella out for the next leg of this journey: Twenty-one counties fell below the state average, indicating stress on a number of fronts — often population loss, job loss or a rise in the poverty level. Counties in Northeast Pennsylvania — home to places such as Hazleton, Wilkes-Barre and Scranton — are on that list. So is Erie County and its neighbors, Warren and Crawford County.

Now the rain comes down hard. Another 21 counties, including most the counties in southwestern Pennsylvania, fell into the bottom category of "Far Below Average", a bland euphemism. Harsher, but more accurate labels come to mind: Distressed. Troubled. Sinking.

All this leads to an important question: Who cares?

Why should someone in Narberth. in Montgomery County, care about a person who lives 306 miles away in Waynesburg, Greene County, just across the line from West Virginia?

In theory, these residents have the common bond of being citizens in the same state. In reality, they are on different planets. To use one recent example: In 2016, Hillary Clinton won Montgomery County with 59 percent of the vote; Donald Trump won Green County with 69 percent.

What binds them, inextricably and permanently, is that these workers and consumers all contribute tax dollars to state government, sending billions to Harrisburg in sales and income taxes. If they buy a house, they pay a tax to the state. If they inherit money, they pay a tax to the state. These tax payments added up to $25 billion to the state's General Fund in one recent year. (Another $6 billion came from business and other miscellaneous taxes, plus license fees.)

People think of state government as a large bureaucracy, and it is that. But, it is also is a redistribution machine — 75 percent of the tax money paid by individuals to the state is returned to counties in the form of grants and subsidies from the General Fund or special funds, such as the Motor Vehicle and Lottery Funds. Here are the top ten departments:

Source: Legislative Budget & Finance Committee, March 2017; Report on State Grants for FY2015-16

In turn, the counties use these billions to help pay for their public schools, fix roads and bridges, provide serves to the poor and aging. The list could go on. The Education Department alone has more than 70 different grant programs for children and schools. Click here to see the list.

The ability of the Commonwealth to provide this money depends on the collective wealth of its citizens. Unfortunately, in the last few years, the amount of money the state spends has exceeded the amount of tax money it brings in.

This has resulted in the nagging billion-dollar deficits that Gov. Wolf and the Republicans who control the state House and Senate have armed wrestled over the last four years. To oversimplify, Gov. Wolf says the state needs more money and wants to increase taxes to get it; the Republicans refuse to support any taxes and want the state to cut spending — and get off the taxpayers' backs.

The purpose of this series is not to dwell on those political divisions. Everyone is pretty much sick of hearing about them. The idea is to step away from the partisan fray and look at some of the underlying trends that will shape the state’s future.

These will include stories on:

Population. The state’s population rose less than one percent between 2010 and 2017 — .08% to be exact. There are 12.8 million people living in the Commonwealth today, a count that is only 102,000 higher than in 2010. The word underwhelming fits. We ranked next to last in population growth among our neighbors in the mid-Atlantic states. Only West Virginia, which lost population, did worse.

When you break the state into its component parts, a more disturbing picture emerges: 46 of the 67 counties lost population during this decade. Not a good sign.

There are only two ways to grow population: One, have the number of babies born exceed the number of people dying. Demographers call this a natural increase. Two, attract new residents from overseas or other states.

Between 2010 and 2017, there were more deaths than births in 43 counties and 46 had a net loss in migrants — the number of people leaving the county exceeded the number coming in.

“There are more people dying than being born,” said Bruce Erb, a county commissioner in Blair County. “We are not a young populace. Family sizes are not as large, particularly in rural counties like ours where family farms are prevalent.”

Blair County, home to Altoona, is a heavily rural county. There were 1,844 more deaths than births in the county during between 2010 and 2017.

Jobs. Pennsylvania has pulled out of the dive that all states experienced with the Great Recession of 2008. Jobs in private industry rose four percent between 2013 and 2017, according to the U.S. Bureau of Labor Statistics. It’s an increase, but below the pace set by most neighboring states.

Looking again at the component parts: job growth fell below the state average of 4 percent in 16 counties and another 23 counties lost jobs. At the bottom of that list was Greene County, which lost 18 percent of its jobs in the last five years. Greene County is coal country and jobs in mining and natural resources took a hit — declining 44 percent over the last five years. But, there were declines in the other eight job categories in the county, including a four percent drop in manufacturing jobs.

On paper, the job situation looks like a split between the east and the west, but it is more complicated than that. As Rick Stafford, public policy expert at Pittsburgh's Carnegie Mellon University put it: “Pennsylvania is not competing with other states. There is a stark difference between the resource and agricultural dependent counties, as opposed to the new economy growth portion.”

Pittsburgh and Philadelphia are good examples of new economy cities. Both cities the lost their manufacturing jobs decades ago and have emerged as places where most people are employed in the education and medical sectors or work in the skyscrapers for new economy companies, such as Comcast.

Steel was once king in southwest Pennsylvania, but most of those plants closed 20 or 30 years ago. Finding new and steady sources of employment has been a long, tough haul. And everyone knows what has happened to coal. These declines drag on the whole state.

“We’re not on anybody’s lists,” said CMU’s Robert Strauss. “Look at our financial position. Our borrowing costs as are way above average. We have no higher education policy that is coherent. The legislature can’t agree on much of anything. We have the Southwest vs. the Southeast. The natural gas business has gotten more efficient; they need fewer workers to get the job done.”

Here are some other areas this series we will be looking into: the rise of non-profits; the haves and have nots when it comes to state aid; the disconnect between politicians and the conditions in their home counties, and the ominous trends in our population.

The election on Nov. 6 is not the end of this journey. It is just the beginning.

Sources for data used in this story:

U.S. Census Bureau, American Community Survey, for the 5-year period between 2012 and 2016.

The U.S. Bureau of Labor Statistics, survey of jobs by county, between 2013 and 2017.

The Pennsylvania State Data Center for county population data, between 2010 and 2017.

The March 2017 report by the state Joint Legislative Budget and Finance Committee: Grant Expenditures by Commonwealth Agencies.

The Pennsylvania Revenue Department Tax Compendium, March 2017.

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