Saturday, February 26, 2011

PA Economy Among National Leaders

As reported at pages 3-4 of the yesterday's Wall Street Journal, Pennsylvania is among the top state economies.  The WSJ ranks Pennsylvania 4th and 12th on two key indicators measuring the 50 states economic recovery and management of debt. 

The WSJ data are consistent with Bureau of Labor Statistics numbers that show Pennsylvania created the 3rd most jobs during 2010 in the USA, while New Jersey ranked 50th.

The WSJ measured each state's pension and long-term debt liabilities as a percentage of state GDP and compared current tax revenues to pre-financial crisis state tax revenues.  State tax revenues collapsed following the disastrous national policies that led to the Lehman Brothers bankruptcy on September 15th, 2008 that froze credit markets, triggering a global collapse of consumer demand, rapidly rising unemployment, and a near depression.

The WSJ calculated that Pennsylvania's current tax revenues are 97% of the pre-crisis level, tied for 4th with Vermont, and only North Dakota, New Hampshire, and South Dakota doing better.  The recovery of tax revenues is another indicator demonstrating the strength of Pennsylvania's diverse economy and of business opportunities here.   As jobs are created, businesses invest, and consumers increase demand, tax revenues rise. On average across the nation state tax revenues are now 89% of their pre-crisis level.

The worst performing states were Louisiana at 72% of pre-crisis revenues, South Carolina at 75%, Florida and Georgia at 79%.  Texas and New Jersey ranked poorly with 86% of pre-crisis revenues.

Nationally states pension and long-term debt liabilities average 7.3% of state Gross Domestic Product (GDP).  How does Pennsylvania compare?  Loud, shrill, highly ideological voices say Pennsylvania is bankrupt and massively in debt.  Is it so? 

Pennsylvania's debt to GDP ratio is a low 4%, well below the national average, ranking 12th. Hawaii and Mississippi ratio is the highest at 16%.  Connecticut, West Virginia, Kentucky, Massachusetts, Rhode Island, Illinois, New Jersey, New Mexico, Oregon, Oklahoma, South Carolina, Maine all have ratios of 10% or higher.

Those are the facts.  Ideologues chanting that Pennsylvania has a bad business environment and government is always-the-one-and-only-problem won't like them and so will just ignore them.  The odds on that?  100%.

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