Pennsylvania Has Such A Bright Future But Josh Shapiro Is Threatening to Ruin It All with Insane Energy Policies

Guest Post by Lowman S. Henry of the Lincoln Institute.

A typical question asked by pollsters is whether the respondent thinks the nation is on the right track or on the wrong track. Rasmussen Reports has been asking the question for nearly 20 years and for the first time since the inception of the poll 50% of likely U.S. voters feel the country is headed in the right direction.

The Conference Board’s Consumer Confidence Index rose by 12.3 points in May and the Present Situation Index, which is based on consumers’ assessment of current business and labor market conditions, rose 4.8 points. The mid-May Consumer Price Index (CPI) reported inflation fell to an annual rate of 2.3%. It had peaked at over 9% during the Biden Administration.

Here in Penn’s Woods there are both hopeful signs and storm clouds. The recent U.S. Steel/Nippon Steel deal brokered by the Trump Administration is the most significant thing to happen to Pennsylvania’s steel industry since the discovery of fire. A new state-of-the-art electric generating plant is slated to be built in Indiana County. President Trump is promoting a resurgence in shipbuilding, which would benefit the Philadelphia region.

But Pennsylvania has a history of snatching defeat from the jaws of economic victory. The state’s energy industry has languished in the wake of former Governor Tom Wolf’s embroiling the commonwealth in the Regional Greenhouse Gas Initiative and Governor Josh Shapiro has continued to support the boondoggle.

The American Legislative Exchange Council (ALEC) and U.S. News & World Report have recently released studies of economic competitiveness among the states and complied rankings of the various components that together create each state’s business climate.

The 18th edition of the Rich States/Poor States: ALEC-Laffer State Economic Competitiveness Index co-authored by famed Reagan economist Dr. Arthur B. Laffer, policy expert Stephen Moore and ALEC President and Chief Economist Jonathan Williams concluded the report “reinforces a clear trend: states that embrace limited government and free-market principles continue to lead America’s economic comeback.”

Pennsylvania is not one of those states ranking 36th in overall economic performance. We were 50th (worse) in the nation on labor policy trailing Right-to-Work states; and 50th for our regressive estate/inheritance tax policies. Particularly impacting the state’s economic competitiveness Pennsylvania ranked 48th in the nation for our top marginal business income tax rate.

There were some bright spots: Pennsylvania ranks second in the nation for a lack of progressivity in personal income taxes (we have a flat rate); 4th in the nation for a relatively low number of public employees per 1,000 population; and 11th in the nation for our sales tax burden.

While the Rich States/Poor States report focuses on economic competitiveness, the U.S. News & World Report Best States rankings are more broad-based taking into consideration factors such as crime, health care, and the natural environment.

With a wider range of inputs Pennsylvania fell even further down the list with an overall ranking of 41 (one being the best, 50 being the worst). The commonwealth ranked 48th in the education and health care categories, 36th for crime & corrections and 30th for opportunity. The state’s best ranking was a 19th place finish for our economy.

A more focused report from the Tax Foundation on gas prices and transportation infrastructure also found Pennsylvania lagging. At 58.7 center per gallon the commonwealth levies the third highest gas tax in the nation, but ranks 41st in the quality of our roads and bridges.

When talking about economic competitiveness Governor Josh Shapiro is fond of saying he is tired of getting beaten by Ohio. Ohio doesn’t exactly win any prizes either ranking 25th in the Rich States/Poor States analysis. Leading the nation in job and state GDP growth is the Beehive State –Utah which has topped the ALEC ranking in each of its 18 years.

Pennsylvania policy makers need to look to states like Utah, Tennessee, Indiana and North Carolina all of which have adopted tax and regulatory policies that create job opportunities and a great quality of life for their residents.

While voters nationwide say America is on the right track, here in Penn’s Woods the Spring 2025 Keystone Business Climate Surveyconducted by the Lincoln Institute found 41% of business owners and CEOs say the state’s business climate has gotten worse over the past six months, only 17% say they have gotten better.

Tremendous opportunity lays ahead for Pennsylvania, but state policies particularly those related to regulation and taxation must change in a pro-growth direction – and fast – otherwise while the rest of the nation enjoys the benefits of growing economy we will be left behind.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly American Radio Journal and Lincoln Radio Journal. His e-mail address is lhenry@lincolninstitute.org.)

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