Coalition Examines Causes of Pennsylvania’s Slow Economy
A coalition of business organizations examining the main factors that have been hindering economic growth in Pennsylvania took a swipe at a “Back to Prosperity” report from the Brookings Institution that blames suburban sprawl for the state’s urban decline and mediocre economic performance. More likely causes for the state’s economic doldrums are poorly coordinated local planning, underperforming city schools, high business taxes and the costs of unionized labor, according to “Forward to Prosperity,” a report released last week by the coalition. Among the recommendations of the study: - Allow high-density, mixed-use development. “Low-density land use zoning implemented by hundreds of local governments leads to conditions that can aggravate sprawl,” the report says. “Reducing or eliminating low-density zoning would eliminate many of these problems. Many municipalities have zoning requirements of one- to five- acre lots. Builders are forced to spread out development to meet density requirements. The result is often irrational, inefficient and sprawling development.”
- Establish effective regional planning as an alternative to the more than 2,500 local governments in the state, in addition to hundreds of local independent authorities, school districts and 67 counties — “a crazy quilt pattern that often befuddles would-be employers considering location in Pennsylvania.” The report notes that, “Municipal governments often cannot make sound planning decisions because of their restricted geographical boundaries. Among other problems, municipal-based planning precludes effective planning for infrastructure, including highways, water and sewer; this lack of effective planning in turn raises an enormous obstacle to Pennsylvania’s economic development.”
- Plan infrastructure to support future growth. “In many cases, municipal authorities are poorly equipped for future expansion in their communities because they have failed to appropriately plan,” the report says. “A common example of this is the inability of many local waste water treatment plants to accommodate future growth. Rather than expand, many decide to restrict growth.”
- Restore balance between open space and urban growth. The report notes that the state has spent hundreds of millions of dollars to preserve and protect farmland and open space, when there is no shortage of either. There are more than 17 million acres of forest land covering 60% of the state, more than 100 years ago. The report recommends that “farmland preservation laws should allow the purchase of only the most productive farmland and soils.” Also, “resources expended for open space should be balanced against other urgent needs.”
- Enact regulatory reforms. “Community leaders believe that there are far too many regulations on business and development in Pennsylvania,” and that there is a lack of coherence in promulgating state regulations and a lack of consistency in implementing and enforcing them.
- Reduce the state’s onerous business taxes. Pennsylvania’s Corporate Net Income tax is the third highest in the nation, and businesses also are required to pay a Capital Stock and Franchise Tax. More than half of Pennsylvanians polled in a survey conducted in conjunction with the study said that high taxes or the cost of doing business are the main reasons businesses pull up stakes and leave the state.
- Encourage affordable housing. “Adequate housing, housing that is accessible and affordable, is a critical resource for attracting and retaining new businesses and economic development into Pennsylvania,” the report says. “The principle is simple and straightforward: there must be housing in close proximity to where a workforce is needed or businesses will not establish themselves in a community.”
In response to the suggestion in the Brookings report that Pennsylvania’s rate of suburban growth has been unusual, the coalition report asserts: “In fact, Pennsylvania’s growth is typical of growth throughout the country and across the world. In the United States since the 1950s, 93% of urbanized growth has been in the suburbs. Development in Pennsylvania is very similar to other parts of the country — indeed to most other parts of the industrialized world.”
“Increasingly, we were hearing state and local government officials, including the governor, cite the Brookings report as a basis for policymaking, and that raised considerable concern,” said James Conner, president of the Pennsylvania Builders Association, a member of the coalition. “You wouldn’t set out on a trip using a map offering bad directions, and we shouldn’t base government policymaking on questionable research that sets us off in the wrong direction either,” said Conner. “The PA Prosperity Coalition was compelled to sponsor this report to give our policymakers clear direction on the steps most important for improving Pennsylvania’s economic vitality.” Other members of the coalition are: the Associated Pennsylvania Constructors, the Delaware County Chamber of Commerce, the Pennsylvania Aggregates and Concrete Association, the Pennsylvania Association of Realtors® and the Pennsylvania Manufacturers' Association. The 45-page report was produced by Michael Young Strategic Research. “Forward to Prosperity,” report (PDF) “Back to Prosperity” - Download Report by Sections:
Executive Summary (PDF)
Chapter 1 - Renewing Older Pennsylvania (PDF)
Chapter 2 - Development Trends in Pennsylvania (PDF)
Chapter 3 - The Consequences of How Pennsylvania Is Growing (PDF)
Chapter 4 - Behind the Trends (PDF)
Chapter 5 - Pulling It All Together (PDF)
Chapter 6 - Back to Prosperity (PDF)
Chapter 7 - Conclusion (PDF)
Background Papers:
 Reforming the state's brownfields program (PDF)
The spatial allocation of PA's seven major economic development programs (PDF)
The spatial allocation of PA's three critical economic development programs (PDF)
Addressing PA's local government fragmentation (PDF) | 
