Pa. Subsidies Getting Smarter (Growth-wise)

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For the first time ever, someone has mapped the same job subsidies in the same state at two different points in time to ask: Is there a change? And is it pro-smart growth?

The answer for Pennsylvania is yes, thanks to this week’s new study from the Keystone Research Center, which revisits subsidies it first mapped in 2003.

Each study covers more than 1,100 deals worth more than $600 million – all over the state. It breaks them down geographically by “older Pennsylvania” (which means cities, boroughs, and first-class townships that were formed pre-early 20th century) and “outer Townships” (the less-dense, second-class townships that make up the rest of the state).

In 2003, Keystone Research found per capita rates were identical in old and new areas of the state. But for the period 2003-2008, older Pennsylvania received 25 percent more dollars per capita than outer townships.

This is not inner-city-versus-exurb, or urban-versus-rural, because “older Pennsylvania” includes all kinds of rural towns and small-city centers throughout the state. And the results are very uneven across different metro areas in the state. (Erie and Reading stand out positively.)

What happened in the interim? Why did the needle move? Why did some areas change more than others? Keystone mostly speculates, summarizing interviews with state and local officials. But Gov. Ed Rendell did form an economic development cabinet and that body did adopt the “Keystone Principles” in 2005, which includes elements like “redevelop first” for existing areas and “fix it first” for infrastructure efficiency.

Some interviewees make it clear they see the value of reinvesting in already-developed areas. Montgomery County, outside Philadelphia, has explicitly embraced a plan that targets economic development subsidies to older areas, especially two of its hardest-hit older towns.

This is a drum Good Jobs First has been banging since 2000, and we applaud Keystone Research Center’s terrific precedent.

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