Brookings: Topics - Pennsylvania

This Week in Economic Numbers: State and Local Edition

Tracy Gordon — Tue, 29 May 2012 11:56:00 -0400

This week will bring a cornucopia of new data, an econo-nerd's dream. Unfortunately for some of us nerds, there won't be any releases on state and local government finances. (The Census Bureau generally has to wait for all states to report and, as you can imagine, some states are laggards.)

However, there will still be a lot in this week's numbers for those who follow state and local government finances, pay into state and local coffers, or consume predominantly state and local public services like education, roads, and health care. Here are a few trends worth watching:

First, Tuesday's March S&P/Case Shiller house price indexes will be important for states whose fortunes are tied to real estate, especially in the West and Southwest. Macroeconomic forecasters are predicting home prices will decline slightly compared to one year ago but continue to increase month-to-month, suggesting that perhaps the market has hit bottom.

That would be good news for the housing sector. However, research from Federal Reserve Board economists Byron Lutz, Raven Molloy, and Hui Shan suggests that any boon to state and local revenues would be minor. They calculate the housing bust per se generated only a $22 billion drop in taxes over three years, equivalent to roughly 3 percent of annual state and local revenues excluding federal funds.

Meanwhile, the latest Census data suggest that state taxes are growing, but at a pace that is slower than usual. More worrisome, the pace appears to be moderating. In recent weeks, California, New York, New Jersey, Pennsylvania, and Rhode Island have all reported taxes coming in below projections. Also, local property taxes are likely to remain in the doldrums for some time. They tend to respond to house price changes with a delay and thus just started showing the effects of the housing bust in late 2010. Property taxes recently turned positive again, but these gains are anemic by historical standards and likely caused by rate hikes in some jurisdictions rather than improving property values.

Next up this week are Bureau of Economic Analysis revisions to first quarter GDP. Macroeconomists will be attuned to how the revisions compare to advance estimates and what this portends for the recovery. They might also take note of whether these governments are detracting from growth - as they have done by an average of 0.2 percentage points in each quarter since 2008 - or contributing to it as usual. State and local watchers will be more focused on state and local spending, which unlike previous downturns, has declined in real per capita terms and not yet recovered.

That leads us to the biggest number to watch this week - Friday's jobs report. State and local employment is already down by 665,000 jobs or about 3.5 percent from its pre-recession peak. Recent trends suggest that cuts may be abating, but this total masks differences across subsectors - state education has been adding jobs while losses continue in all other subsectors, especially at the local level.

Ongoing state and local job losses also distinguish this recession from previous downturns in the modern era. This may be in keeping with the depths of this Great Recession. However, it's hard to imagine state and local residents aren't feeling the pinch of higher property tax burdens or lower services. To take one example, Governor Jerry Brown has proposed closing California's $16 billion budget gap by converting state employees to a four day work week and closing state parks. From a macro perspective, the fiscal tightening may be over. But that doesn't mean state and local governments aren't still a real drag.

Authors

Tracy Gordon

Publication: Real Clear Markets

Image Source: © Daniel Shanken / Reuters

The President's Only Chance for 2012

William A. Galston — Wed, 16 Nov 2011 11:09:00 -0500

In a series of pieces during the past two weeks (see here, here, and here), I've laid out the evidence for two propositions: The president's economic record will be at the heart of the 2012 election, and he cannot win without focusing on the heartland — the swing states stretching from Pennsylvania to Iowa.

The case for the first proposition goes as follows:

To an extent that we haven't seen since 1992 (and maybe not even then), the 2012 election will focus on a single issue: economic growth and job creation.

For that reason above all, President Obama will be waging an uphill battle for reelection, because the American people are giving his management of the economy very low grades. (Recent CBS/NYT surveys have placed approval of his performance on the economy and job creation at below 40 percent.)

While for understandable reasons the president's campaign team wants to turn the election into a choice between two futures, the odds of success for that strategy seem low. Most political scientists who have studied the question conclude that when there's an incumbent in the race, the principal issue is that candidate's job performance. (That's why Reagan's "Are you better off..." was such a killer question against Carter in 1980.)

President Obama, therefore, has no choice but to address the economic question head-on, which will require him to offer a much more persuasive defense of his record than he has up to now.

The case for my second proposition — the Heartland Strategy — is this:

The president's team hopes to recreate the "new majority" strategy that expanded the playing field and led to victories in states such as Virginia, North Carolina, Colorado, and Nevada in 2008 and perhaps Arizona and Georgia as well in 2012. This does not seem realistic, however: while the president's support among African Americans remains strong, it has dropped sharply among Hispanics disappointed by what they see as his failure to push for comprehensive immigration reform and his administration's aggressive deportation strategy. And every survey and focus group points to diminished enthusiasm among the young adults whose relentless networking on Obama's behalf contributed significantly to his historic victory.

To make matters worse, the president's numbers in Florida are dismal, he trails likely Republican nominee Mitt Romney by 10 points in New Hampshire, and he has no chance of repeating his 2008 miracle victory in Indiana.

These facts underscore the crucial importance of the heartland states — especially Ohio and Pennsylvania. As a matter of history and simple arithmetic, is very unlikely that President Obama can be reelected without carrying them both.

Although Pennsylvania is usually 3 to 4 points more Democratic than Ohio, the evidence suggests that Obama is surprisingly weak there and needs to do some real work to shore up his standing in a state that Democrats often regard as being in the bag.

As for Ohio, the last Democrat to take the White house without winning that state was John Kennedy, who did it with electoral votes from Texas and other southern states that Obama will not receive. (The last Republican to win the presidency without Ohio? There hasn't been one since the founding of the party in the 1850s.)

Ohio is pivotal, election after election, because it is a demographic and political microcosm of the country. If a presidential candidate can win a majority there, he or she can almost certainly do so in the nation as well. And that's why both parties should pay close attention to the results of last week's election, in which the Ohio electorate overwhelmingly rejected both Gov. Kasich's assault on public sector unions and the individual mandate at the heart of President Obama's health reform law.

If these two core propositions are correct — if the 2012 election will be about Obama's economic stewardship and will be won or lost in the heartland — then the key question is this: How can the president defend his economic record in a region much of which has not enjoyed robust growth for quite some time?

Let's look at some basics:

It's hard to imagine Obama losing Illinois or winning Indiana in 2012. That leaves six key heartland states. Note what they have in common: despite widely varying rates of unemployment, none of them has experienced a rapid decline in that rate over the past year. Because there's no sense of dynamism in the region, hope and confidence in the future are at a low ebb. That's the reality the president must speak to, there and elsewhere.

How can Obama recast the economic discussion? Here's my best shot:

First, he must acknowledge Americans' sense of being stuck and then explain why recovery from this downturn has been so painfully slow — in particular, the impact of the financial collapse and our excessive debt burden, private as well as public.

Second, he must display some humility and acknowledge that he didn't get everything right. It was a mistake not to underscore the difficulty of our circumstances right from the start. It was a mistake to predict that unemployment would peak at 8 percent if his stimulus bill were enacted. While it was necessary to save the big financial institutions from a total meltdown, it was a mistake to ask so little from them institutions in return. And it was a mistake to act so timidly in the face of a housing and mortgage crisis that has cost the middle class many trillions of dollars in lost wealth.

Third, he should emphasize what most Americans believe: without the steps his administration took at the depth of the crisis, there might well have been a second Great Depression. Sure, "It could have been much worse" isn't much of a bumper sticker, but it's a place to start, and it has the merit of being true.

Fourth, what he has done so far has not only halted the decline but has yielded more than twenty consecutive months of growth in private sector jobs — progress that would be more noticeable if states and localities hadn't been shedding so many employees in response to the squeeze on their budgets.

Fifth, while most Americans didn't like it when his administration intervened to save GM and Chrysler, it was the right thing to do, not only for auto workers, but for much of the heartland's economy as well. Allowing these two firms to dissolve would have broken the back of regions already struggling with double-digit unemployment. Leadership means doing what's necessary and right, even when it's unpopular.

Sixth, we now have the opportunity to build on the foundation laid during this painful period in our history. Obama can emphasize steps such as: a bold new response to housing foreclosures and underwater mortgages; an infrastructure bank that mobilizes both domestic and foreign capital to put Americans back to work on projects that will strengthen our economy; and a tougher stance vis-à-vis Chinese policies that have taken their toll on American workers and firms. And yes, we need to come together around fundamental spending and tax reform that can stabilize our fiscal future without further undermining the hard-pressed middle class.

That's the guts of the affirmative case Obama can make. (No doubt he believes he's already doing it, but he hasn't been frank, comprehensive, and persistent enough to break through.) And if he does make it relentlessly until next Labor Day, he can then pivot and ask, What's the alternative? What is my opponent offering? If you think that an agenda of deregulation for big polluters, more tax breaks for the wealthy, and a laissez-faire policy that allows the housing sector to "hit bottom" is the way to jump start job creation, the by all means vote for him. If you don't, you have a chance to continue moving down a path that can move us from the shadows of stagnation to the sunlight of opportunity and to build a new economy in which all Americans — not just a favored few — enjoy the fruits of growth.

Authors

William A. Galston

Publication: The Huffington Post

Image Source: Â© Kevin Lamarque / Reuters

What America's Cities Need

Bruce Katz and Judith Rodin — Fri, 04 Jun 2010 10:02:00 -0400

Cities across America are undergoing massive demographic change, and Philadelphia is no exception. Understanding this change, and effectively managing it, will be key to our national progress and prosperity in this decade and beyond.

A new report from the Brookings Institution, "The State of Metropolitan America," describes a nation that has grown larger, more diverse, more suburban, and more educated in the first decade of this century. These characteristics offer the potential for a tremendous advantage among industrialized nations as the global economy becomes more integrated and more competitive.

The Philadelphia region, for instance, is now home to 92 colleges and universities - more than the renowned concentration of higher education institutions in the Boston area. In our research on the demographic transformation of the nation, we refer to Philadelphia as a "skilled anchor" - one of 19 metro areas, including Baltimore, Rochester, N.Y., and Boston, that have made a transition from manufacturing and shipping to service-based economies. Medical and educational institutions have often driven this transformation, along with specialized manufacturing.

Skilled anchors face challenges, however, due to other trends. While 32 percent of Philadelphia area residents over the age of 25 hold bachelor's degrees, only 21 percent of residents of the city itself have been educated beyond high school.

That is cause for concern, especially as baby boomers begin to retire - most notably in the suburbs, where more than 40 percent of the residents are boomers and seniors. The young people who will take their place in the workforce are not completing college education at the same rate as their predecessors. This is problematic considering that median household income declined during the 2000s, and higher education is closely correlated with higher wages.

Meeting the region's future workforce challenges - that is, connecting residents to high-quality jobs in the education, medicine, life-sciences, and pharmaceutical sectors - will require education policies that prepare all children for successful postsecondary education, so they can build on the economic momentum of the retiring baby boomers.

As part of the national Achieving the Dream Initiative, several foundations are working together to help community colleges in Michigan, Ohio, and Indiana improve completion rates for minority and low-income students who are most at risk of dropping out and not getting the skills and credentials they need to succeed in the workforce.

Other demographic trends represent challenges as well as opportunities. The Philadelphia region's foreign-born population grew by 30 percent in the 2000s, albeit from a relatively small base. Efforts to incorporate immigrants into the mainstream of economic and civic life - such as Philadelphia's language-access policy, its one-stop education office, and the region's emerging Metropolitan Caucus - are all praiseworthy. But more is required.

At the same time, while solutions must be built from the ground up, the Philadelphia region can't go it alone. The federal government can't wait for megacities such as Philadelphia to work out the massive transformation under way by themselves. There are macro-level federal responses to these trends that could and should emanate from Washington.

Among them are comprehensive immigration reform that includes explicit means for improving the integration of new Americans into our society and economy; a revamping of transportation and housing policy that reduces energy-inefficient sprawl, accommodates seniors, and provides access to employment centers; programs to increase postsecondary education for our emerging workforce; and a redoubling of efforts to make work pay for working families, such as the Earned Income Tax Credit.

Over the past decade, between two recessions, Philadelphia has made much progress. Today, the region must capitalize on its hard-earned gains and address emerging challenges with similar conviction.

Philadelphia and America are changing in front of our eyes. Public policy decisions crucial to our health, prosperity, and security need to be informed by what's happening now. We cannot afford to look for our future in the rearview mirror.

Authors

Bruce Katz
Judith Rodin

Publication: Philadelphia Inquirer

What's at Stake for Pittsburgh? The G-20 Should Focus on What's Good for Cities

Bruce Katz — Tue, 22 Sep 2009 10:54:30 -0400

There's been a lot of talk of Pittsburgh's "new economy" as a key reason for the city's star turn as host of this week's G-20 summit, but little has been said about the region's "next economy" -- what comes after the current slump.

It's beginning to be created under our noses.

Though seemingly abstract, the G-20's big-picture decisions -- on dialing down the extraordinary fiscal and monetary steps taken in the past year, building a new regulatory architecture for global finance, and starting the process towards a more balanced global economy and sustainable future -- have big implications for metropolitan areas.

Pittsburgh's stake in the G-20 deliberations goes beyond filling up local hotels and restaurants or hiring additional police -- and even beyond showcasing the region's resilience to the recession.

The fact is that Pittsburgh already is a global metropolis, with deep and growing ties to many of the G-20 countries because of its position as a supplier to the global steel industry (and still a maker of some types of steel), its burgeoning involvement in clean-energy sectors and its established position as a global center of education and health care.

Bayer, the German pharmaceutical conglomerate, has its U.S. headquarters in Pittsburgh, employing some 2,700 workers, including 1,200 at local medical-device manufacturer Medrad. Gamesa, the Spanish wind-energy giant, opened its first North American plant in Ebensburg, about 75 miles east of Pittsburgh. All told, more than 300 international firms from 26 different countries operate in the region, employing tens of thousands of people.

Pittsburgh's goods and services exports make up more than 14 percent of the region's gross metropolitan product, with the lion's share of goods headed to Canada, China, Japan and major economies in Europe -- all G-20 partners.

Given Pittsburgh's global status, the G-20 discussions have substantial implications for the future of the region's $100 billion economy.

The big question, at this summit and others in the future, is how to rebalance the global economy. The Great Recession followed a period of excessive consumption in the United States as Americans spent more on homes and consumer goods than they produced.

The fix is easy to state, but difficult to engineer. As Larry Summers, the head of the White House National Economic Council, said recently, "The rebuilt American economy must be more export-oriented and less consumption-oriented."

This rebalancing will require major and sustained action on currency values and trade policy in the United States as well as in large export economies like China, Germany and Japan (which will need to consume more). As this occurs, U.S. metro areas like Pittsburgh could benefit substantially given their unique assets and special niches.

While this won't quite be a 21st-century version of the equation "what Pittsburgh makes, the world takes," the combination of a more export-oriented trade policy and higher costs for carbon emissions (also to be discussed at the G-20 summit) present the region's economy with both opportunities and threats.

On the plus side, Pittsburgh could export more to the rest of the world and its steel-industry suppliers could benefit from increased exports by U.S. steelmakers. Higher prices for gasoline and jet fuel could mean that manufacturers and retailers in the United States would move away from far-flung networks of global suppliers and rely more on U.S. companies.

There is a potential downside for Pittsburgh, as well: for instance, as steelmakers in Germany and other countries export less and face higher costs of using U.S.-based suppliers, they might rely less on machinery and repair services from Pittsburgh.

To help ensure that the benefits of a rebalanced U.S. economy and a new climate regime outweigh the costs to the Pittsburgh area, local corporate, labor, political, university and civic leaders need a sharp regional business plan to guide the economic policies and innovation investments that they and the federal and state governments make in the Pittsburgh area.

Pittsburgh will have to continue to reclaim polluted industrial "brown fields" for post-industrial use -- an example for cities around the country and world.

Pittsburgh also will need to figure out how to draw more international traffic to its metropolitan airport, which currently offers only one direct flight to Europe.

The upshot: It is time for U.S. metropolitan regions to become more globally fluent and for national leaders to connect their big-picture policies to the fortunes of the urban areas that drive their economies. Only in this way can the United States, and Pittsburgh, move to the next stage of their economic evolution.

Authors

Bruce Katz

Publication: Pittsburgh Post-Gazette

Metro Philadelphia’s Energy Efficiency Strategy: Promoting Regionalism to Advance Recovery

Mark Muro and Sarah Rahman — Tue, 07 Jul 2009 00:00:00 -0400

Bringing together the five counties of Southeastern Pennsylvania, the nonprofit Metropolitan Caucus, a new regional consortium there, is promoting a joint regional application for ARRA’s competitive Energy Efficiency and Conservation Block Grant dollars. Its four-part proposal, which will add and refine partners and programs over time, draws on the collaboration of multiple regional institutions to establish and operate a loan fund for green building and retrofits; support clean energy technology deployment; assist local governments with energy efficiency plans; and measure the energy performance of public facilities.

The newly created Metropolitan Caucus of southeastern Pennsylvania is leading the bold new regional energy efficiency strategy targeting for the competitive Energy Efficiency and Conservation Block Grants (EECBG) in the American Recovery and Reinvestment Act (ARRA). Unprecedented for the region, the Metropolitan Caucus has brought together five area counties—Bucks, Chester, Delaware, Montgomery, and Philadelphia—to make the most of the stimulus opportunity by coordinating their plans, goals, and assets to achieve maximum regional benefit. Their proposed joint EECBG competitive application for roughly $35 million calls for financing construction and retrofits, supporting clean energy companies, measuring building energy performance, and assisting local governments in implementing various sustainability solutions. To carry out each of these activities, the caucus intends to engage in broad cross-sector collaboration to leverage the strengths and unique assets of regional educational institutions, key nonprofits, and planning agencies.

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Recent Immigration to Philadelphia: Regional Change in a Re-Emerging Gateway

Michael Katz, David Park, Audrey Singer and Domenic Vitiello — Thu, 13 Nov 2008 12:00:00 -0500

An analysis of the growth and characteristics of the foreign-born in the Philadelphia metropolitan area between 1970 and 2006 finds:

Among its peers, metropolitan Philadelphia has the largest and fastest growing immigrant population, which now stands at over 500,000, comprising 9 percent of the population. Between 2000 and 2006, greater Philadelphia’s immigrant population grew by 113,000, nearly as many as had arrived in the decade of the 1990s.
Metropolitan Philadelphia has a diverse mix of immigrants and refugees from Asia (39 percent), Latin America and the Caribbean (28 percent), Europe (23 percent) and Africa (8 percent). The 10 largest source countries are India, Mexico, China, Vietnam, Korea, Italy, Ukraine, Philippines, Jamaica, and Germany.
Immigrant growth in suburban Philadelphia has outpaced the city’s growth, but numerically, the city has the largest population of all local jurisdictions. Outside the city, Montgomery County had the earliest post- World War II suburban settlement of the foreign born and has the largest number of immigrants among jurisdictions, while Chester County saw the fastest growth during the 1970-2006 time period.
Nearly 60 percent of the foreign-born living in metropolitan Philadelphia arrived in the United States after 1990. Although their naturalization rates and educational levels reflect their recentness of arrival, on the whole, greater Philadelphia’s immigrants are doing well on these measures as compared with some other U.S. metropolitan immigrant populations.
Nearly 75 percent of greater Philadelphia’s labor force growth since 2000 is attributable to immigrants. Immigrants’ contributions to the labor force are considerably higher in this period than in the 1990s, when just 36 percent of the growth was due to immigrants.

A long history of immigration to Philadelphia stalled in the mid-20th century and the region became nearly entirely native born. In the past 15 years, however, immigration is emerging again as a prominent feature of life in the region. The varied immigrant groups—high-skilled professionals, refugees, and laborers from a diverse set of origin countries — bring both opportunities and challenges for policy makers, service providers, and communities throughout greater Philadelphia.

Additional Resources:
Philadelphia Immigration Event Presentation, Philadelphia Free Library, November 13, 2008 »

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Authors

Michael Katz
David Park
Audrey Singer
Domenic Vitiello

Pennsylvania Speaks: The Democratic Contest Will Continue

William A. Galston — Wed, 23 Apr 2008 12:00:00 -0400

In last night’s Pennsylvania primary, Hillary Clinton won a sweeping if not quite overwhelming victory, receiving 55 percent of the vote and reducing Barack Obama’s overall popular vote edge by more than 200,000. Because of the Democratic party’s system of proportional representation, she netted fewer than 15 pledged delegates. These results have quieted calls for her to leave the race and will probably slow the steady flow of superdelegates to Obama. Nonetheless, her path to the nomination remains steep.

The demographics of the Pennsylvania vote followed a now-familiar pattern. Obama won among voters younger than 40, while Clinton prevailed among older voters. Obama won in big cities and some inner suburbs; Clinton carried suburbs overall while winning more than 60 percent of the small town and rural vote. Clinton did 9 points worse among men than among women, who constituted 59 percent of last night’s voters. She received 62 percent of the vote from gun-owning households and almost three-fifths of the vote from union households. Obama carried voters from families making less than $15,000 and more than $150,000; Clinton carried everyone in between. She received 64 percent of the vote from high school graduates but only 48 percent from college graduates. Obama won 55 percent of the vote among those who consider themselves “very liberal,” while Clinton got 60 percent of the vote among self-described moderates. Clinton took 56 percent among long-time Democrats, while Obama took 62 percent of new Democratic primary voters—principally Republicans and Independents who registered as Democrats to participate, but also the 4 percent of the primary electorate that previously been unregistered.

There is evidence that religion, gender and race all figured in the results. Clinton received 58 percent of the white Protestant vote and a stunning 71 percent of white Catholics. Obama got 64 percent of those who profess no religion and 56 percent of those who never attend church. Clinton did 22 points better among those who said gender was important than among those who did not. (Intriguingly, men who said it mattered were also more likely to support Clinton.) By contrast, race appears to have been a negative for Obama: whites who said it mattered gave 75 percent of their votes to Clinton, versus only 58 percent for those who said it did not. While nearly half the whites for whom race mattered refused to say that they would be willing to support Obama in the general election, their sentiments may well soften in coming months as differences between the parties come to the fore.

The long campaign mattered, and it left some bruises. 68 percent of the voters said that Clinton had attacked unfairly; 50 percent thought Obama had. Nearly a quarter of the electorate thought that Clinton was solely responsible for unfair attacks, versus only 6 percent who thought Obama was. Only 57 percent of the electorate thought that Clinton was honest and trustworthy, versus 67 percent for Obama. Only 40 percent said they would be satisfied if either candidate won; 32 percent wanted only Clinton, and 23 percent only Obama. But however negative the contest may have turned, it appears to have worked to Clinton’s advantage: she received 57 percent among voters who decided during the last week before the primary, 5 points better than she did among those who decided earlier.

The results also confirmed the surge in concern about the economy. Fifty-five percent of the voters regarded the economy as the top issue, versus only 27 percent for the war in Iraq and a modest 14 percent for health care. Obama prevailed only among voters who gave top priority to Iraq, while Clinton received 54 percent of the health care voters and 58 percent of the economy voters.

Attention now shifts to the May 6 primaries in North Carolina and Indiana. Obama is expected to prevail in North Carolina, but Indiana offers a level playing field. A split decision would be likely to prolong the race, while an Obama sweep might well induce many undecided superdelegates to declare for him and bring this protracted contest to an end. In addition, Obama’s fundraising edge is becoming increasingly important. Not long into her victory speech, Clinton made an urgent pitch for new contributions. Facing a mounting debt and dwindling cash on hand, her ability to continue on until the end of the primary and caucus season in early June may well depend on the size and speed of her supporters’ response.

Authors

William A. Galston

The Political Geography of Pennsylvania: Not Another Rust Belt State

William H. Frey and Ruy Teixeira — Tue, 15 Apr 2008 12:00:00 -0400

This is the first in a series of reports on the demographic and political dynamics under way in 10 “battleground” states, deemed to be crucial in deciding the 2008 election. As part of the Metropolitan Policy Program’s Blueprint for American Prosperity, this series will provide an electoral component to the initiative’s analysis of and prescriptions for bolstering the health and vitality of America’s metropolitan areas, the engines of the U.S economy. This report focuses on Pennsylvania. Among its specific findings are:

Pennsylvania is becoming a demographic “bridge” between Midwestern states like Ohio and other Northeastern states like New Jersey, as its new growth is tied to urban coastal regions. While often classed as a so-called “Rust Belt” state, its eastern and south central regions are increasingly becoming part of the nation’s Northeast Corridor, with new growth and demographic profiles that warrant attention in upcoming elections.
Eligible voter populations indicate a state in transition, where minorities, especially Hispanics, and white college graduates are increasingly important, but where white working class voters continue to play a central role. While white working class voters continue to decline as a share of voters and are less likely to work in manufacturing and goods production, they are still a critical segment of voters, including in the fast-growing Harrisburg and Allentown regions where their absolute numbers are actually increasing.
Recent Democratic victories in Pennsylvania have featured strong support from groups like minorities, single women, and the young but have also benefited from relatively strong support among the white working class, especially among its upwardly mobile segment that has some college education. Compared to 1988, both the latter group and white college graduates have increased their support for Democrats. And both groups have increased their share of voters over the time period.
Political shifts in Pennsylvania since 1988 have seen the growing eastern part of the state swing toward the Democrats, producing four straight presidential victories for that party. The swing has been sharpest in the Philadelphia suburbs, but has also been strong in the Allentown region and even affected the pro-Republican Harrisburg region. Countering this swing, the declining western part of the state has been moving toward the GOP.
Key trends and groups to watch in 2008 include the white working class, especially whites with some college, who, unlike the rest of this group, are growing; white college graduates; and Hispanics, who have been driving the growth of the minority vote.

These trends could have their strongest impact in the fast-growing Allentown region, which may move solidly into the Democratic column in 2008 and beyond, following the trajectory of the Philadelphia suburbs. The even-faster-growing Harrisburg region remains a GOP firewall, but the same trends could make that region more closely contested in 2008.

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Obama Criticized for 'Bitter' Blue-Collar Remarks

Sherry Linkon, Reihan Salam and Ruy Teixeira — Mon, 14 Apr 2008 12:00:00 -0400

Ruy Teixeira joins NPR's Talk of the Nation host Neal Conan to discuss the Pennsylvania primary and the working-class vote.

NEAL CONAN: With us here in Studio 3A is Ruy Teixeira, a visiting fellow at Brookings Institution, co-author of the report "The Decline of the White Working Class and the Rise of a Mass Upper Middle Class." He's kind enough to be with us here. Thanks very much for coming in, nice to see you again.

RUY TEIXEIRA: Great to be here.

NEAL CONAN: And, what are some of the common themes that we see around these working class voters that Sherry Linkon was talking to us about?

RUY TEIXEIRA: Well, I think Sherry touched on a number of them. I think one critical theme, obviously, for this election is their level of economic discontent and their sense that the economic ground has shifted underneath their feet, and they are sort of wondering where they are going to go in the future, where their kids are going to go, sort of, where their way of life is going to go.

This is a matter of great concern to these voters because the last, you know, actually the last several years, have not been kind to them. But more broadly, you can look back, you know, 35 years and say the last 35 years has not been very kind to them. This has been a period when America, by and large, has grown not as fast as it did and incomes have not risen as fast as they used to, but it's been particularly bad for these voters.

Anyone with less than a four-year college degree has really done rather poorly since about the middle 1970s. So, there's a real question in their minds of what America has in store for them in the future. And they are very interested to hear what politicians have to say about it. So far, it hasn't seemed to work out quite so well.

And the other side of it is really touched on by the controversy that you're referring to which is their sense of cultural traditionalism, their sense that, especially the Democrats, perhaps, seem out of touch with that at times. It seems like they don't respect their way of life. It seems like their social liberalism gets in the way of connecting to these voters and really hearing what they have to say and what their commitments and priorities really are and a sense of elitism on their part.

And that's really what, I think, Obama's getting slammed on this, you know, in general, and of course, obviously the McCain and Clinton campaigns have some interest in pushing this, but it did give them an opening to raise this issue and argue that, in fact, he is elitist. And Democrats, if they wish to get away from this, they have to adopt - I think it's a little bit unfair to the remark once you look at it in context.

But nevertheless, the perception was there particularly, I think the stuff about guns and about religion. I mean, can't you, like, own a gun and go to church and not be clinging to it? Because you know, your economic way of life is deteriorating. Again, I don't think that's what he meant. But that's how it's being interpreted. And that's where the discussion is.

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Authors

Sherry Linkon
Reihan Salam
Ruy Teixeira

Publication: NPR Talk of the Nation

Pennsylvania Economic Revival Lies in its Metro Assets

Bruce Katz, Amy Liu and Steve Wray — Mon, 14 Apr 2008 12:00:00 -0400

In the long run-up to the Pennsylvania primary, there's been a good deal of candidate discussion of the state's economy and how to fix it.

But missing from the prescriptions of what the federal government would do and how it would do it has been a discussion of where it will happen.

That needs to change because place matters. For all the ink spilled on the declining fortunes of the commonwealth, there are many bright spots around the state that could be catalysts to growth and prosperity.

Recent Brookings research shows strength in varied fields across the state:

Advanced health care, pharmaceuticals, and information technology in Greater Philadelphia.

Health care, architecture and engineering, and banking in Pittsburgh.

Heavy construction, machinery and food processing in Lancaster.

Industrial gases, health care and higher education in the Lehigh Valley.

The state's economy is an amalgam of its 16 metropolitan areas that generate 92 percent of its economic output.

The top six metropolitan areas alone - Philadelphia, Pittsburgh, Harrisburg-Carlisle, Allentown-Bethlehem-Easton, Scranton/Wilkes-Barre, and Lancaster - constitute 68.4 percent of the state's population and produce 80.5 percent of the state's economic output.

The research underscores that four key assets overwhelmingly located in metropolitan areas - innovation, modern infrastructure, strong human capital, and quality places - are needed today to drive productivity of firms and workers, improve the wealth and opportunities of families, and ensure sustainable growth. America's metropolitan assets - the universities, the health-care concentrations, and the skilled-labor pools - are the drivers of our national economy and the key to future American competitiveness and success.

So what does this mean for Greater Philadelphia? And what would a more thoughtful federal role look like?

Two realms with extensive current federal involvement are transportation infrastructure and innovation. Cogent efforts from Washington in both these areas could significantly leverage state and local efforts.

Rather than thinly spreading transportation-infrastructure dollars across the country, the federal government should spend strategically.

For Greater Philadelphia, supporting its competitive advantage as the linchpin of Amtrak's Northeast Corridor with federal dollars for more frequent and reliable service would strengthen the region as a rail hub, as has been championed by the Greater Philadelphia Chamber of Commerce.

Additionally, federal transportation policy should empower metropolitan areas with the discretion to spend funds flexibly, whether that's improving the aging SEPTA system, beginning the work of reinventing and burying Interstate 95 to increase access to the Delaware waterfront, or increasing transit access of city residents to suburban jobs.

Regarding innovation, unfortunately, the federal government currently has no unified national strategy to maximize high-quality jobs and spread their benefits throughout the Philadelphia region. Instead, it has a series of highly fragmented investments and programs.

Current programs put strong emphasis on research, but are insufficiently attentive to the commercialization of that research and blind to how innovation and jobs arise from the intense interaction of firms, industry associations, workers, universities and investors - a nexus ready to be capitalized on in Greater Philadelphia as documented by the Economy League of Philadelphia in a report for the CEO Council for Growth.

To this end, the federal government should reorganize its efforts and create a National Innovation Foundation, a nimble, lean organization whose sole purpose would be to work with industries, universities, business chambers, and local and state governments to spur innovation. Similar, successful national agencies are already up and running in competing nations, such as Britain, France, Sweden and Japan.

This effort should include R&D and support for technology-intensive industries such as information technology and pharmaceuticals, but it also must make small and medium-size manufacturers more competitive and train workers in manufacturing and low-tech services to work smarter.

Looking forward, our federal government must realize this is a "Metro Nation" and value and strengthen economic juggernauts such as Philadelphia.

Only by organizing our currently fragmented investments in transportation and innovation - and targeting them where they will provide the greatest return, metropolitan America - will the United States continue not only to compete, but also to lead.

Authors

Bruce Katz
Amy Liu
Steve Wray

Publication: The Philadelphia Inquirer

Metropolitan Pennsylvania

Amy Liu — Tue, 01 Apr 2008 15:30:00 -0400

In Pennsylvania, the next major presidential primary state, concerns about the economy loom large as global competition, economic restructuring, and an aging workforce threaten the state’s ability to prosper. A true economic agenda for the state and its 16 metropolitan areas must speak to the core assets of Pennsylvania’s economy and where these assets are located: the state’s many small and large metropolitan areas. Amy Liu says an effort has to be made to build upon those assets for the future of the Keystone state and the nation as a whole.

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Pennsylvania Metro Areas' Economic Potential

An Economic Plan for the Commonwealth: Unleashing the Assets of Metropolitan Pennsylvania

Bruce Katz and Amy Liu — Mon, 31 Mar 2008 00:00:00 -0400

In Pennsylvania, the next major presidential primary state, concerns about the economy loom large as global competition, economic restructuring, and an aging workforce threaten the state’s ability to prosper. Thanks to these assets, the six metro areas generate 80 percent of the state’s economic output even though they house 68 percent of its population. A true economic agenda for the state must speak to the core assets of Pennsylvania’s economy and where these assets are located: the state’s many small and large metropolitan areas. In short, this brief finds that:

To help Pennsylvania prosper, federal leaders must leverage four key assets that matter today—innovation, human capital, infrastructure, and quality places. These assets help increase the productivity of firms and workers, boost the incomes of families and workers, and can help the state and nation grow in more fiscally and environmentally responsible ways.
These four assets are highly concentrated in the state’s economic engines, its metropolitan areas. There are 16 metro areas in the Commonwealth, ranging from Philadelphia, the most populous, to Williamsport, the smallest. The top six metropolitan areas alone generate the bulk of the state’s innovation (80 percent of all patenting), contain the majority of the state’s educated workforce (77 percent of all adults with a bachelors degree), and serve as the state’s transport hubs.
Despite these assets, Pennsylvania’s metro areas have yet to achieve their full economic potential. For instance, Philadelphia and Pittsburgh enjoy strengths in innovation, but they both struggle to convert their research investments into commercial products and real jobs. The Scranton metro area is emerging as a satellite of the New York City region, but it’s hampered by the absence of frequent and reliable transportation connections and inadequate broadband coverage.
Federal leaders must advance an economic agenda that empowers states and metro areas to leverage their assets and help the nation prosper. To that end, they should establish a single federal entity that works with industry, states, and metro areas to ensure that innovation results in jobs and helps businesses small and large modernize. The federal government should strengthen access and success through the entire education pipeline. They should overhaul and create a 21st century transportation system. And they should use housing policy to support quality, mixed-income communities rather than perpetuating distressed neighborhoods with few school and job options.

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Philly's Many Walkable "Center Cities"

Christopher B. Leinberger — Wed, 20 Feb 2008 00:00:00 -0500

WALK SCORE, a new Web site popular with urbanists and environmentalists (walkscore.com), rates places for their walkability—the ease of meeting daily needs on foot.

The popularity of the site is an indicator that how the American Dream plays out on the ground has been fundamentally changing over the last 10 to 15 years.

The Ozzie and Harriet drivable suburban version of the American Dream is being supplemented by the Seinfeld vision of "walkable urbanism." Led by late-marrying young adults and empty-nester baby-boomers, many households are looking for the excitement and options living and working in a walkable urban place can bring. With almost nine of 10 new households over the next 20 years being singles or couples without children, this trend promises to continue.

A recent Brookings Institution survey of the largest 30 metro areas in the country identifies the 157 walkable urban places that play a regionally significant role. It also ranks the Top 30 metros in per capita number of walkable urban places. The Philadelphia metropolitan area ranks as the 13th highest on the number of walkable urban places per capita.

Certainly the many already revived downtowns like those in Denver, Washington, Portland, Seattle and San Diego are the most visible signs of the walkable urban trend. But there are many other places you might not suspect.

This includes the emergence of "downtown-adjacent" places like Chelsea and Union Square in New York, suburban town centers like Pasadena and Long Beach in the L.A. area and even built-from-scratch spots like Reston Town Center near Dulles Airport, 30 miles outside Washington.

A major benefit of walkable urban development is that it keeps and attracts young adults to the metro area, many of whom willingly trade crushing car commutes and high gas prices for lively walkable places to live and work.

Walkable urban places seem to attract the well-educated, the so-called "creative class."

Approximately 26 percent of Americans over 25 have college degree - but 99 percent of the new residents moving to Center City this decade have a college degree.

Walkable urbanism increases the economic development potential of the metro area in the knowledge economy. If many of the Gen X-ers and the Millennial generations do not get this lifestyle, they'll move to New York or Washington, depriving Philadelphia of the entrepreneurs it needs to grow.

Walkable urbanism is also essential to create sustainable places to live and work, reducing greenhouse-gas emissions. It is probable that walkable urban households emit less than half the greenhouse gas as driving suburban households - they walk more and unavoidably share heat with upstairs neighbors.

Center City and Society Hill are the most obvious, though not the only, locations of this trend in the Philadelphia region. The recent emergence of University City around Penn and Drexel, Manayunk and New Hope are other significant walkable urban places in the Delaware Valley.

Missing are additional places in the suburbs, particularly around commuter and subway stations.

Rail transit is crucial for walkable urbanism places to emerge.

The investment has already been made for this comprehensive, if underfunded, rail system. Building high-density, mixed-use places around these stations will fulfill pent-up market demand, promote economic growth, lower greenhouse emissions and even give their suburban neighbors a great place for a restaurant within walking distance.

Over the next few years, Philadelphia metro will no doubt see its ranking in the Brookings survey rise while more households will see their Walk Score numbers soar. Seinfeld is coming to Philadelphia. *

Leinberger is a visiting fellow at the Brookings Institution, professor at the University of Michigan and a limited partner in Arcadia Land Co., which has projects in the Philadelphia and Kansas City areas. His most recent book is "The Option of Urbanism: Investing in a new American dream" (Island Press, 2007).

Authors

Christopher B. Leinberger

Publication: Philadelphia Daily News

"The Vital Center": A Federal-State Compact to Renew the Great Lakes Region

John C. Austin — Mon, 01 Oct 2007 12:00:00 -0400

Brookings John Austin provided Great Lakes regional economic context for a forum of Ohio and Pennsylvania business and civic leaders convened by Congressmen Jason Altmire (PA), and Tim Ryan (OH) to develop strategies for growing the bi-state regional economy.

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John C. Austin

Calling the Commonwealth: Revitalizing Pittsburgh

Bruce Katz and Jennifer S. Vey — Sun, 27 May 2007 00:00:00 -0400

State governments must get more involved and provide more support to revitalize cities like Pittsburgh.

Places Rated Almanac's recent designation of Pittsburgh as "America's Most Livable City" spurred a small flurry among area journalists and bloggers— with some touting the rating as confirmation of the qualities locals know and love, and others deriding it as little more than a nice bit of puff that discounts the city's systemic problems.

Both views are right, of course.

This past week The Brookings Institution released "Restoring Prosperity: The State Role in Revitalizing America's Older Industrial Cities." The study looked at 302 U.S. cities on eight indicators of economic health and residential well-being, and found that Pittsburgh is among 65 cities still underperforming compared to their peers nationwide.

Most of these cities, and their regions, are still struggling to make a successful transition from an economy based on routine manufacturing to one based on more knowledge-oriented activities. But the report is emphatic that the moment is ripe for the revival of these urban economies—if state and local leaders focus not only on leveraging cities' "livability" but also on the economic assets that can fuel their long-term competitiveness.

To be sure, Pittsburgh has a wide range of attributes and resources—affordable, walkable neighborhoods, reasonable commute times, historic buildings, a slew of recreational amenities—that make it a good place in which to buy a home and raise a family. But these assets haven't been enough to keep and attract residents and jobs. At least not yet.

Luckily, demographic and economic trends are giving Pittsburgh and other distressed cities the best chance for a comeback in decades.

Major demographic shifts—including a rise in the number of immigrants, an aging population and shrinking household sizes—are having a profound influence on how and where people choose to live, to the benefit of many cities. Urban areas from Chicago to Chattanooga are becoming more attractive to empty nester baby-boomers, young professionals and others seeking a city lifestyle. These urbanites are sparking a resurgence in downtowns and inner-city neighborhoods and offering hope to those places—like Pittsburgh—that are starting to catch the wave.

At the same time, globalization, technological advances and other economic trends are causing a renewed appreciation for the density and diversity that sets urban areas apart from the suburban fringe. The role and function of higher education and medical facilities in economic development, meanwhile, is growing—a potential boon to the Pittsburgh area, which boasts nearly two dozen four-year and two-year colleges and universities, as well as nearly 20 hospitals and medical facilities.

But to capitalize on these trends, older industrial cities need a new strategy—one that moves beyond policies and programs aimed at managing fiscal distress and urban decline and instead includes integrated policies and practices aimed at improving city-wide market performance. Local leaders need to articulate their own vision of success and a strategy by which to achieve it. But they can't go it alone: To truly catalyze city revitalization, state governments need to engage on multiple fronts.

In the past several years, the commonwealth of Pennsylvania has begun to make reinvestment in the state's cities and towns a priority. But more needs to be done. Pittsburgh and other Pennsylvania cities must continue to lean on state leaders to enact a true reform agenda for urban areas and to insist on more support in their efforts to develop innovative, competitive economies that are attractive to new firms and workers.

In Pittsburgh, the priorities should be pretty clear. Harrisburg needs to work with local governments and civic and business leaders to build on Pittsburgh's existing economic strengths—by investing in Downtown and fueling innovative economic growth, particularly through the region's remarkable concentration of academic institutions and cutting-edge research centers.

Two Heinz Endowments initiatives—Downtown Now and the Innovation Economy Program—focus on a range of strategies aimed at spurring development in Pittsburgh's urban core, as well as advancing the region's capacity to commercialize new technologies and to create and attract high-quality jobs. The state can build on such programs by making transformative investments in Downtown infrastructure; by creating incentives for home buyers, businesses and developers to locate in, preserve and redevelop historic buildings, and by making regional cluster development the major tenet of its economic-development policies.

Second, the commonwealth needs to help the city and metropolis realize the potential of a state-of-the-art mass transit system. Transit has become a competitive necessity for American metro areas, a generator of smart development and a vehicle to achieve important environmental and social objectives. The state should secure a dedicated source of public revenue for the Port Authority and other transit agencies, end the transit systems' annual budget crises and allow Pittsburgh to plan for regional transit extensions rather than service reductions and fare hikes. The state also should expand incentives for redeveloping and revitalizing communities around existing transit facilities.

Finally, Pittsburgh—and all cities, boroughs and townships in the commonwealth—need more latitude and support to collaborate across the arcane labyrinth of municipal boundaries that, aside from being absurdly inefficient, also undercut the competitiveness of the entire state. With hundreds of counties, cities, boroughs and townships competing for businesses and jobs, they all engage in a race to the bottom that no one can possibly win—a fact well-recognized by groups like the Allegheny Conference on Community Development, which has made the structural and functional consolidation of Pittsburgh and Allegheny County one of its focal issues.

The Rendell administration's revival of the once defunct State Planning Board is a first step toward substantial governance reform in the state. Local leaders now need to urge the General Assembly to enact the legal changes necessary to facilitate the consolidation of the city and county governments and to provide incentives for voluntary collaboration among other local governments. These changes are needed to ward off fiscal distress, save money, better manage development and build the regional economy.

For the first time in several decades, there is reason to be truly optimistic about Pittsburgh's future. Advancing beyond hope, however, requires a vision of the possible—and the will of the commonwealth to help the city achieve it.

Authors

Publication: Pittsburgh Post-Gazette

Back to Prosperity: A Competitive Agenda for Renewing Pennsylvania

Bruce Katz — Fri, 18 May 2007 00:00:00 -0400

Like many Midwestern states, Pennsylvania is transitioning slowly from an industrial past to a knowledge economy. As it does so, the state's development patterns—slow growth, fast sprawl, struggling cities and older suburbs—undermines the state's competitive future. In a presentation to the Congress for the New Urbanism, Bruce Katz assesses Pennsylvania's efforts to adopt a new competitive agenda.

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Bruce Katz

Publication: The Congress for the New Urbanism

Pennsylvania Must Speed Up Reforms to Prosper: Growth Remains Slow Despite Hint of Progress

Amy Liu, Mark Muro and Rebecca Sohmer — Sun, 08 Apr 2007 00:00:00 -0400

So how is Pennsylvania doing?

Is the commonwealth moving at last toward vitality?

Three years after our group at the Brookings Institution Metropolitan Policy Program released its 2003 report "Back to Prosperity," the answer to that question is mixed.

Pennsylvania is at once the same and different today, as we suggest in a just-released update of our earlier report.

And for that reason, we believe the time has come for state government—especially the General Assembly—to commit to deep-going reforms that will build on the visible beginnings of change in Pennsylvania and so begin altering a system that remains too much the same.

"Back to Prosperity" proposed a strong new vision of how Pennsylvania might excel in the global economy by revitalizing its cities, towns and regions, yet for all that, the tough challenges identified in the first report still exist.

The state remains one of the slowest-growing in the nation (although in 2003 to 2005, the state enjoyed a net in-migration of nearly 10,000 people after years of outflow).

Cities and boroughs continue to lose population as households move into previously undeveloped outlying communities (although here, too, signs of life can be found in an uptick in new housing construction and rehabilitation in many older communities).

For that matter, the commonwealth's nonfarm employment grew by just 1.1 percent, compared with the nation's 3.3 percent growth during the years 2000-2006 (though even here, the state's rank among states improved from 45th in the 1990s to 37th in this decade).

The bottom line: The same trends of slow growth, "hollowing" metropolitan and rural areas, and deindustrialization that have gripped the state for decades still do today and require urgent, possibly radical responses.

Yet much has changed in the last three years, which is why we remain optimistic about the state's ability to make headway on its pursuit of prosperity.

Thoughtful debates have begun in Pennsylvania regions over how best to update the local governance system to empower municipalities to innovate in pursuing greater efficiency and fiscal strength.

State agencies are spending tax dollars more strategically and working to align community development, economic development and transportation investment with a new, place-oriented vision of economic success.

Public opinion has shifted. Voters are now strongly supportive of common-sense thinking on such key issues as empowering local government and concentrating investment in existing communities, according to recent polling.

The dozens of regional leaders we met with in a number of "listening sessions" in the last year frequently expressed impatience with the pace of change and expressed determination to make change themselves, if need be.

Even so, the starkness of the state's predicament underscores that these welcome developments represent only a beginning.

What is needed now, early in a strong governor's second term, with a new Legislature in place, is a recommitment to the hard work of institutionalizing truly systemic reform that will result in sustained progress.

To that end, we urge the General Assembly to join the Rendell administration in bearing down on three crucial reform priorities that we think offer promise for revitalizing the state by bolstering its urban and rural economies and quality of place:

Empower local governments to better manage change, combat fiscal distress and invest in the future. Through its revival of the State Planning Board, the Rendell administration has done a good job engaging a diversity of stakeholders in mapping out a reasonable path toward substantial governance and planning reform. Now the General Assembly should embrace key elements of that agenda by enacting legal changes to make it much easier for local governments to collaborate with their neighbors, re-engineer the way they deliver services, provide amenities and raise revenue in a way that is more equitable and sustainable. Action along these lines will be essential to offering the attractive quality of life needed if Pennsylvania is to retain and attract top firms and workers.
Continue making reinvestment a priority. The Rendell administration has launched a nationally significant drive—epitomized by its Keystone Principles for Growth, Investment and Resource Conservation—to prioritize investment in existing communities and existing infrastructure and so make good use of the taxpayers' money. Still, much work remains to further institutionalize these spending criteria, link transportation investment to land-use planning and rein in haphazard water and sewer development to channel growth into existing communities.
Continue building a competitive economy through strategic investment in key clusters and complementary workforce development. The state has finally taken important steps to develop a clear long-range plan for diversifying its transitioning economy, fostering promising industrial clusters, and "tuning" the workforce training system to the needs of those clusters. Now the state needs to go further in supporting the emergence of promising regional clusters, making sure its workforce system supports itself.

The time has come to go deeper, at a time when the recent legislative shake-ups in Harrisburg show voters are no longer so tolerant of business as usual.

Change has begun in Pennsylvania, but now the state needs to summon the will to enact the deeper reforms that will in time yield a more prosperous future for all Pennsylvanians.

Authors

Amy Liu
Mark Muro
Rebecca Sohmer

Publication: The Patriot-News (Harrisburg, PA)

Committing to Prosperity: Moving Forward on the Agenda to Renew Pennsylvania

Thu, 01 Mar 2007 00:00:00 -0500

"Committing to Prosperity," an update of Metropolitan Policy Program's 2003 report "Back to Prosperity: A Competitive Agenda to Renew Pennsylvania," revisits the state of the Commonwealth and reviews policy reform activity to date. Overall, the report concludes that while Pennsylvania's major trends—slow population growth, "hollowing" rural and metropolitan areas, and economic struggles—by and large persist, major policy reform is underway. Ultimately, "Committing to Prosperity" urges Pennsylvania to go beyond incremental adjustments to enact deep, systemic change.

Download the Executive Summary >>

Related Paper:
Strengthening Rural Pennsylvania: An Integrated Approach to a Prosperous Commonwealth

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Click on a metro area name below to download short profiles that contain basic metro-specific trend information.

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New Goals and Outcomes for Temporary Assistance: State Choices in the Decade after Enactment

Margy Waller and Shawn Fremstad — Tue, 01 Aug 2006 00:00:00 -0400

Findings
A review of spending decisions nationwide and in three states—Ohio, Pennsylvania, and Wisconsin—under the Temporary Assistance program since its enactment in 1996 finds that:

Nationwide, states have evolved from spending most Temporary Assistance funding on cash assistance to spending more on benefits and services to a large number of families who do not receive cash assistance. In 1997 and 1998, state officials focused on retooling the previous program, and spent considerably less than was available under the federal block grant. From 1999 to 2001, state officials dramatically expanded spending on child care and other work supports under the block grant, and reduced cash assistance expenditures. From 2001 to 2004, state spending on Temporary Assistance stabilized. Though states spent a substantial 24 percent of these funds on "social services" in 2004, more than $1.6 billion in excess of the amount of funding allocated to child care, no uniform information is available to national policymakers regarding these services.
Overall spending levels on Temporary Assistance in the three states have diverged in recent years. All three states built up reserves of unspent funds in the initial years of the program equal to half or more of their annual federal block grant allocation. Between 2001 and 2004, Temporary Assistance expenditures jumped in Pennsylvania, remained relatively stable in Wisconsin, and dropped back to their 1998 levels in Ohio. Meanwhile, Pennsylvania and Wisconsin have spent more than half their initial reserves, while Ohio's reserve fund continues to grow.
All three states spend a majority of Temporary Assistance funds on benefits and services other than cash assistance. Cash assistance accounted for between a quarter and a third of Temporary Assistance spending in the three states in 2004, far less than in 1998. Wisconsin spends 44 percent of its Temporary Assistance funds on child care, more than double the proportion in Ohio and Pennsylvania, where officials spend almost three out of 10 program dollars on social services.
As in the rest of the nation, each of the three states provides Temporary Assistance-funded benefits to a substantial number of low-wage workers who do not receive cash assistance. For example, in 2001, Wisconsin officials provided more than 56,000 individuals not part of the cash assistance caseload with benefits and services funded by Temporary Assistance, such as child care, job training, and state earned income credit payments. Federal officials do not count these individuals in the program caseload since the policy only requires that state officials report assistance recipients.

Because most states now spend a majority of their Temporary Assistance funds on benefits and services other than cash assistance, they must demonstrate to federal policymakers and others that the program promotes more than "welfare to work." To do so, state and local officials should articulate goals and develop new program measures that reflect the reality of funding decisions, and thus promote the long-term viability of the federal block grant program.

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Margy Waller
Shawn Fremstad

Higher Education In Pennsylvania: A Competitive Asset For Communities

Jennifer S. Vey — Wed, 21 Jun 2006 00:00:00 -0400

In this presentation at the Pennsylvania League of Cities and Municipalities Annual Convention, Jennifer Vey describes how Pennsylvania's higher education institutions are a major competitive asset for the state and its localities.

The metro program hosts and participates in a variety of public forums. To view a complete list of these events, please visit the metro program's Speeches and Events page which provides copies of major speeches, PowerPoint presentations, event transcripts, and event summaries.

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Jennifer S. Vey

Publication: Pennsylvania League of Cities and Municipalities