Municipal distress getting worse in Pennsylvania, new data show

The Pennsylvania Economy League released a report on Tuesday showing predictions in its last study have borne out.

That’s not a good thing.

The league warned in 2007 that the struggles of distressed communities would worsen where they already existed and emerge anew elsewhere — unless local government codes were updated by state lawmakers.

“Our local tax laws are 60 years old. Sixty years ago, our tax system treated cities as the centers of wealth and everyone else as a farmer. That’s no longer the case,” says Gerry Cross, executive director of the League’s Central Division.

But although a few pertinent bills have been introduced, not many of them have become law, since the league’s last report on this issue in 10 years ago.

And now, there’s data to show municipal distress has accelerated throughout much of the state, even in suburban areas — not only cities — the stereotypical backdrop for failed local governance.

That was a main finding in the 200-page report released Tuesday by the League.

It also delves into how the costs of law enforcement are disproportionately shouldered by poorer communities. Those numbers were released as a shorter standalone analysis earlier this year. 

Most of the statewide analysis shouldn’t be surprising, though, particularly for seasoned legislators whom the study’s authors and backers say they’re targeting with the new report.

And yet very little has happened since 2004 in the way of changing state regulations for local government. Lawmakers did revamp the Commonwealth’s Act 47 program for distressed municipalities. But some experts now say the changes, such as establishing deadlines and a process for dismantling local government, were misguided and failed to address issues at the core of communities’ fiscal troubles.

Cross suggested two key factors behind legislative inaction.

“Most people in private life don’t think about their local government until something goes wrong,” Cross says.

He says another reason is rooted in legislators’ backgrounds.

“Wardman, councilman, school board, state representative — that type of advancement — you don’t see that as often as now because of the dispersal of the population. So you have more people elected from different positions in life, not necessarily an elected ladder. And there is a difference in perspective when you have to raise taxes on your neighbors,” Cross says.

Cross says the point of the report is to illuminate the issues, not give advice on how to determine legislative priorities.

But the document notes some potential areas of focus, such as more taxing flexibility for local governments, setting criteria for when counties should reassess property values and adjusting the formula for allocating state aid for municipal retirement systems.

The full report is available at the Pennsylvania Economy League website.

Nearly a dozen community foundations from across the state sponsored the study.