The Pennsylvania Manufacturers’ Association
Tom Armstrong, Policy Director
www.pamanufacturers.org
March 2003
THE SILENT KILLER
Pennsylvania Manufacturing Employment 1991-2002
Source: Bureau of Economic Analysis, US Department of Commerce. 2002 preliminary data is from the Bureau of Labor Statistics (February 2003). 2002 employment is seasonally adjusted.
750,000
800,000
850,000
900,000
950,000
1,000,000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Pennsylvania Business Taxes
Top Rate Top Rate7.00 mills 12%6.99 mills 10.5%3.00 mills 9.99%2.70 mills 9.975%2.50 mills 9.8%2.50 mills 9.75%2.10 mills 9.5%1.75 mills 9.4%1.50 mills 9%
9%0.75 mills 9%
6.64%
(Tied) New Jersey(Tied) Rhode Island(Tied) West Virginia
Note: Pennsylvania and West Virginia are the only states on both lists.
North Carolina
US AVERAGE (2002)*US AVERAGE (2002)
Highest CNIT RatesIowaNorth DakotaPennsylvania
TennesseeKentuckyAlabama
District of ColumbiaMinnesotaVermontMassachusetts
* Calculated using PA's CSFT rate of 7.24 mills for 2002.
Highest 2002 Business Tax Rates in AmericaHighest CSFT Rates
West VirginiaPennsylvania (2003)LouisianaArkansasMississippi
Alaska
The Silent Killer…
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00
Local Spending
Non-GF
State General Fund
Population
Inflation line
Local Gvt. Expenditures
State Non-General Fund
State General Fund
PA Population (in millions)Growth of Inflation: Annual Average 5.1%
$43.6 billion
$19.8 billion
12,281,054
$70.5 billion75
Pennsylvania State & Local GovernmentSpending 1970-2001 in billions65
55
45
35
25
15
(10 mi l l ion)
Average Annual Increases, Total PA State Operating Expenditures vs. Inflation: 1980-2002
0%
1%
2%
3%
4%
5%
6%
7%
8%
Total State Operating Expenditures Inflation
6.7%
3.4%
PA Change in Population Vs. PA Change in Government Employees 1990-2000
Source: US Census Bureau
0%
2%
4%
6%
8%
10%
12%
14%
Population Government Employees
11.7%
3.4%
PA’S SLOW JOB GROWTH
Pennsylvania lagged national growth in almost every occupation.
Pennsylvania is expected to continue this trend…
…unless something changes.
PA Employment Growth by Industry 1990-2000
-20
-10
0
10
20
30
40
50
Services Retail Trade Wholesale Trade Finance, Insurance, &Real Estate
Manufacturing
PA
US
-9.49
-3.35
Source: Bureau of Economic Analysis, US Department of Commerce
Projected PA Employment Growth by Industry 1998-2008
-15
-10
-5
0
5
10
15
20
25
30
35
Services Retail Trade Wholesale Trade Finance, Insurance, & RealEstate
Manufacturing
PAUS
- 5.1%
- 0.5%
Source: PA Center for Workforce Information and
THE SILENT KILLER1. PA’s Poor Economic Performance: Slow
economic growth2. High Government Spending & Taxation:
Killing economic opportunity in PA3. PA’s Slow Job Growth: PA’s working age
population will continue to seek opportunities in other states resulting in PA having stagnant population growth along with the 2nd oldest population behind FL
4. Reverse the Silent Killer: Government spending and taxation needs to be reduced for greater economic opportunity for PA’s job creators and citizens
TOP 10 RECOMMENDATIONS
10.Expand Keystone Opportunity
9. Retain the R&D Tax Credit by Repealing the Sunset Date & Cap
8. Reduce the Corporate Net Income Tax to 5.99%
7. Continue and Accelerate the Phase-Our of the Capital Stock and Franchise
6. Enact a Statute of Repose
TOP 10 RECOMMENDATIONS
5. Unemployment Compensation Reform
4. Place Caps on Non-Economic Damages of $250,000 or Less
3. Employer/Employee Restrictions Relief
2. Reduce and Change State and Local Annual Government Spending Bases on Economic Principles
TOP 10 RECOMMENDATIONS
And, one more needed
economic reform in Pennsylvania:
1. ENACT TAXPAYER PROTECTIONS
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