By-the-numbers: COVID-19’s big hit to Pa.’s economy

Budget shortfall, job losses and lost wages

• Ed Mahon
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  Ed Mahon comes to Spotlight PA from PA Post, where he covered state politics and policy, produced radio stories that were broadcast on public media stations throughout the state and on NPR’s national newscasts, and co-wrote a weekday newsletter. Prior to joining PA Post, Ed worked for six years as an investigative and political reporter for the York Daily Record, part of the USA Today Network. His reporting on failures in Pennsylvania’s system for protecting domestic abuse victims was a finalist in the national 2018 Livingston Awards for Young Journalists in the local reporting category. He was also part of a team whose coverage of the criminal justice system, including the aggressive use of civil asset forfeiture by York County prosecutors, received the 2018 G. Richard Dew Award for Journalistic Service from the Pennsylvania NewsMedia Association. Before joining the York Daily Record, Ed covered K-12 education at the Centre Daily Times in State College and worked as a stringer for suburban sections of The Philadelphia Inquirer. He grew up in Delaware County, Pennsylvania.

 Keith Srakocic / AP Photo

A woman and man wear COVID-19 protective masks as she pushes her shopping cart and a man loads his truck in a parking lot, Friday, July 3, 2020, in McCandless, Pa.

Keith Srakocic / AP Photo

A woman and man wear COVID-19 protective masks as she pushes her shopping cart and a man loads his truck in a parking lot, Friday, July 3, 2020, in McCandless, Pa. 

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.

Best of the rest

Official White House Photo by D. Myles Cullen

Vice President Mike Pence participates in a tour Friday, June 12, 2020, at Oberg Industries in Sarver, Pa.

• Pennsylvania Vice: Joe Biden, the former vice president and now the presumptive Democratic nominee for president, plans to stop in Lackawanna County today to tour a metal works facility and deliver remarks on his economic recovery plan, WNEP reports. The current vice president, Mike Pence, plans to stop in Lancaster County as he launches a bus tour through the state. The Associated Press and LNP report Pence’s plans include a fundraiser in Manheim, a roundtable discussion in Chester County about reopening the economy, and a speech to Philadelphia police officers at their union hall ahead of a “Back the Blue Rally.” I’ll be in Lancaster County to cover Pence’s visit.

• What to know about the polls: The Pence and Biden visits come as recent polls show Biden has a significant lead over President Donald Trump in Pennsylvania. On WITF’s Smart Talk, host Scott LaMar spoke with Franklin & Marshall College pollster Berwood Yost about how much trust people should have in the accuracy of those polls. Yost said Trump should be concerned that independent voters are “running away from the president.”

• Elections have consequences: The U.S. Supreme Court on Wednesday ruled that employers can cite religious or moral objections to opt out of providing insurance coverage for reproductive health care. It’s a big ruling that resolves a debate over one of Obamacare’s key provisions that’s been winding its way through the courts in one form or another for years. As The Philadelphia Inquirer notes, the “7-2 ruling overturned previous decisions by federal courts in Philadelphia, which had blocked the rules from taking effect.”

• Challenging Pa.’s “felony-murder” convictions: More than 1,100 people in Pennsylvania are serving life terms for those convictions, WESA’s An-Li Herring reports. Those convictions are situations where smeone is convicted of second-degree murder for any felony that “results in death, even if the offenders did not intend for death to occur or take a life themselves,” Li-Herring writes. She describes how six state prisoners are challenging automatic life sentences for those “felony-murder” convictions, saying it is “an antiquated doctrine that allows prosecutors to cast a wide net and punish people for the unintended and tragic consequences of certain felonies.”

• Erie’s big win? The state Board of Education gave final approval Wednesday to Erie’s three-year campaign to open a new community college. Time to celebrate, right? As Ed Mahon reported yesterday, opponents like state Senate President Pro Tem Joe Scarnati (R) could still appeal the board’s decision. For now, though, it’s full steam ahead, as GoErie.com notes.

• Blowing the whistle: Wednesday’s Context reported the possibility that the Ivy League would be the first Division I NCAA conference to cancel fall sports due to coronavirus concerns. And that’s exactly what the schools decided to do.

• Fact check: U.S. Rep. Matt Cartwright is one of the most endangered Democrats running for reelection this fall. His GOP opponent, Jim Bognet, is attacking Cartwright, saying the incumbent wants to defund the Wilkes-Barre police department. The Philadelphia Inquirer looked into it and determined Bognet’s attack on Cartwright is FALSE.

• Climate inaction: The Republican-controlled Pa. House of Representatives is taking steps to block Gov. Tom Wolf’s executive order to have Pennsylvania join the Regional Greenhouse Gas Initiative — a multi-state program aimed at limiting carbon emissions. StateImpact Pennsylvania has the details.

Coronavirus reads:

• PennLive: Getting tested for coronavirus in Pa. is becoming more difficult amid wave of new infections

• Pittsburgh Post-Gazette: Allegheny County to allow outdoor dining, bars and casinos to reopen Friday — with restrictions

• WESA: New Research Details Racial, Socioeconomic Inequities During School Shutdown Across Allegheny County

• Spotlight PA: Evictions loom large as Pa. renter relief program stumbles, lacks Spanish-language application

• The Morning Call: 5 takeaways on the $20 billion in PPP loans to Pennsylvania businesses amid coronavirus crisis

• PA Post: Wolf will officially veto GOP effort to end coronavirus emergency

• LNP: Millersville president discusses reopening, on-campus tracing app and more with United Nations panel

• New York Times: Sweden Has Become the World’s Cautionary Tale

Correction: Don’t believe everything you read on the internet. A reader named Harry wrote last night to note that Wednesday’s Context was wrong to say that the Centennial Conference had decided to cancel all fall sports. That’s not entirely correct, he noted. The conference, which includes many prestigious liberal arts colleges in Pa., suspended fall sports. The presidents of the schools will reassess the situation in September. Football, the conference said, will not be played in the fall. The editor of this newsletter apologizes for the error.