PART I. The PROBLEM: PA’s grim demographics have a profound impact on workforce and state revenue.
Here is what the expert, Matthew Knittel, M.A., Ph.D., director of PA’s Independent Fiscal Office, said at the Senate Budget Hearing on March 20, 2023:
Sen. Steven Santarsiero asked about where Dr. Knittel would rank the demographic issue as something for the General Assembly to address. “I would put it at the top. It might even be No. 1,” Knittel replied.
Here are the grim facts about the old folks: People are getting older and long-term care costs are increasing.
- One in four Pennsylvanians are senior citizens and by the end of the decade one in three state residents will be senior citizens.
- The state already ranks third among states in the number of residents over the age of 85 and fifth in the number of seniors.
More grim facts: People are moving out and they are not replaced by births.
- More working-age people are moving out of PA than are moving in and there are more deaths than births.
The end result is a declining working-age population. The results are serious and should be addressed.
As the retirement-age population grows, Pennsylvanians will have to spend more money on social services, which already account for a large amount of state government expenditures. As the working-age people who pay the taxes that fund state government move out, there is less revenue.
Of special note to MBA members, there is less and less workforce.
PART II. A SOLUTION: GROW PA legislation will incentivize young people to stay, raise families and work.
Who knows where this package of bills, Senate Bills 1150, 1151, 1152, 1153, 1154, and 1155, will be by the time this article is published and the tug-of-war over the state budget is either over or in full-combat mode. Partisan politics may raise its ugly head during this ugly election year, ignore the critical fact that without a workforce there is no economy and bludgeon this legislation.
Here’s why both Republicans and Democrats should like GROW PA. These two bills have “Golden Incentives.” Among the bills are these two that encourage residency in PA.
Senate Bill 1150 would create the Grow PA Scholarship Grant Program, which would offer grants of up to $5,000 per year for in-state students who attend college in Pennsylvania, pursue a degree in a high-demand industry, and agree to live and work in that industry in Pennsylvania after graduation.
Grant recipients would be required to live and work in Pennsylvania for at least 15 months for each year they accept the grant. Failure to meet this requirement would result in the grants being converted to a loan that must be repaid.
Senate Bill 1151 would create the Grow PA Merit Scholarship Program, which would help attract high-performing out-of-state students to Pennsylvania educational programs in Pennsylvania State System of Higher Education (PASSHE) schools. The merit scholarships would allow students pursuing in-demand occupations to pay tuition at in-state rates, rather than out- of-state rates.
Like the scholarship program for in-state students, merit scholarship recipients would be required to live and work in Pennsylvania after graduation or have the scholarships converted to loans.
The bottom line is that while lawmakers focus on various types of legislation, they fail to see that we are competing with other states for young people. Yes, we are competing with other states regarding the time it takes to get a permit; yes, we are competing regarding which state has the lowest corporate net income tax or the best net operating loss for start-ups, or which state has allowed recreational marijuana. Lost in that fragmented shuffle is the fact that the most important competition is for young people. Yes, young people!
Young people are migrating to states for better opportunities. They are moving to Florida, Texas, Georgia, the Carolinas and Tennessee.
While there is not enough space here to discuss all of the bills in the package, the goal is to keep the state’s youth within its borders and boost the economy as a way to deal with workforce shortages, high college costs and the struggle of lagging behind other states.
Eileen Anderson is the director of Government Relations at the Manufacturer & Business Association. Contact her at 412/805-5707 or eileenanderson@mbausa.org.
