Gov. Tom Wolf recently declared 2022 a “magical year” for the Pennsylvania budget, citing the possibility of a surplus. However, Pennsylvania’s Independent Fiscal Office (IFO) predicts this “magic” will not last long. The IFO’s latest Five Year Budget Outlook projects that the state will return to a deficit by fiscal year 2023-24.

That’s because our budget surplus didn’t result from a strong economy and growing tax base — it’s a counterfeit surplus partly driven by federal aid and debt. Rather than spending that money to expand government, lawmakers should consider the future and budget responsibly.

Irresponsible spending has a clear consequence: our most productive residents will simply leave. New data from the United States Census Bureau indicates that many former Pennsylvanians already had enough of Wolf’s big government policies.

Pennsylvania saw total a population loss of 25,569 from July 2020 to July 2021. About 12% of this loss was due to people leaving the Keystone State in favor of another. This continues a concerning 11-year trend of loss from domestic migration. Pennsylvania lost a net 3,194 people to other states, about nine per day. Additionally, the commonwealth ranked 48th in U-Haul’s annual growth index rankings, ahead of only Illinois and California.

The most recent United Van Lines National Movers Study found that a job was the most common reason residents moved out of Pennsylvania, with 35.8% of respondents citing this motive. This is no surprise, as Pennsylvania’s economy is still struggling to return to where it was before the pandemic.

This trend will continue to shrink Pennsylvania’s workforce, causing staffing shortages and stagnant economic growth. According to the IFO’s October 2021 demographic update, Pennsylvania’s working-age population (20-64 years old) has decreased by 60,000, despite a 70,000 state population increase during the same period. The same report projects the working-age population to further decline by 250,000 by 2025 if current policies continue.

The combination of an aging and emigrating working-age population will make Pennsylvania unproductive and unappealing to new residents. Simply stopping outmigration will not solve the problem. Pennsylvania needs to begin attracting workers from other states with well-paying jobs.

To understand how Pennsylvania can become competitive with other states, it is important to look at what the most attractive states are doing. According to Census Bureau data, Florida and Texas attracted the most domestic migrants. Neither state has a state income tax. In fact, seven out of the nine states with no state income tax saw a net population gain from domestic migration. Six out of the 10 highest tax states saw net population loss from domestic migration.

Beyond tax rates, Americans are moving to states with high levels of fiscal stability in state government. Four out of the five states with the highest fiscal stability saw net population gain from domestic migration. Pennsylvania ranks 47th in fiscal stability.

We can turn this around.

House Bill 71, also known as the Taxpayer Protection Act (TPA), would create a constitutional restraint on Pennsylvania’s spending. The bill limits spending increases by tying them to personal income growth, population changes and the inflation rate. Sixty-three percent of Pennsylvania voters support this, and it is easy to see why: if the TPA had passed in FY 2003–2004 and remained in place through FY 2021-22, taxpayers would have saved over $46.6 billion.

The TPA would allow our commonwealth to build up its miniscule rainy-day fund and strengthen its fiscal stability. Additionally, lower spending would allow the state government to further decrease or even eliminate the state’s income tax. Fiscal stability and low taxes are attractive to domestic migrants. Similar bills enacted in other states have shown they avoid economic stagnation and foster growth.

Pennsylvania faces severe population problems — outmigration and an aging workforce — and big government policies will make things worse. National trends show residents are fleeing high-tax, fiscally unstable states. Lawmakers need to pass the TPA and help make Pennsylvania the economically desirable, destination state it deserves to be.

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