Ed Mahon/PA Post
A recent report from the state Independent Fiscal Office shows just how big of a hit Pennsylvania’s economy will take thanks to the shutdown orders imposed to slow the spread of coronavirus.
That report estimates that the state government faces a nearly $5 billion shortfall over two years. And the director of the office told me the situation could get worse.
In making its estimate, Matthew Knittel’s office assumed several things that could turn out to be wrong, including that consumers will largely go back to their old spending habits, a second outbreak won’t trigger more statewide business closures, and schools and colleges will reopen this fall.
“I can’t recall a year with so much uncertainty around it,” Knittel told me.
Those unknowns all could make things worse for the state’s economy. But Knittel says two other unknowns could improve the outlook: Will Congress and President Trump agree to another stimulus bill? And will they give states more flexibility so they can use stimulus money to make up for revenue losses?
Even with those unknowns, the report paints a bleak picture. Here is a by-the-numbers look based on the IFO report and other sources:
- $3.2 billion: That’s the state government’s revenue shortfall for the fiscal year that ended on June 30. Lower-than-projected revenue from corporate net income taxes, personal income taxes and sales taxes accounted for the largest share of the drop. But Knittel says some of that money will eventually make its way to the state. The shortfalls were partially caused by the state pushing back deadlines for filing 2019 corporate net income and personal income taxes (due on July 15!).
- 453,000: The number of net payroll jobs that will be lost this year in Pennsylvania, according to an IFO forecast. Accommodations and food service jobs take the biggest hit, with an expected loss of 134,200 jobs. Wholesale/retail jobs follow with a loss of 70,100 positions.
- 309,700: The number of net payroll jobs that Pennsylvania’s economy will add in 2021, the IFO forecasts. It’s good to see job growth predicted for 2021, but note that the growth projected is still lower than the amount of positions lost by the end of 2020.
- 3.2 percent: How much total wages and salaries will drop this year in Pennsylvania. For comparison, during the Great Recession, in 2009, wages and salaries dropped by 2.3 percent in the state
- $24.3 billion: How much in unemployed benefits have been paid since mid-March in Pennsylvania, according to the state Department of Labor and Industry. That includes $10.3 billion from regular unemployment compensation. An additional $11 billion was paid as part of the Federal Pandemic Unemployment Compensation, which provides an extra $600 per week for anyone receiving unemployment benefits. That program will end this month, unless Congress acts to extend it. Knittel told me that money has helped prop up the economy in Pennsylvania.
- 90 percent: The share of Pennsylvania workers who filed for unemployment benefits who actually received at least one payment as of July 8, the state Department of Labor and Industry says. That covers anyone who applied between March 15 and June 6.
- 25th: Pennsylvania’s per capita rank among states for confirmed COVID-19 cases per 100,000 people, according to data published yesterday by Johns Hopkins University. Pennsylvania’s rank fell after cases surged in other states, including Florida. As of Wednesday, 92,148 Pennsylvanians had tested positive.
- 11th: Pennsylvania’s per capita rank for COVID-19 deaths, according to Johns Hopkins University. As of Wednesday, the state had reported 6,812 deaths.
- 45th: Pennsylvania’s ranking for coronavirus testing, according to Johns Hopkins. That’s a measure of tests per 100,000 people.
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