A blog post by Mark Price, originally published at Third and State.

A toxic cocktail of state budget choices by the Corbett administration — which include holding in reserve more than half a billion in unexpected tax revenue, corporate tax cuts and a needlessly delayed and ultimately inadequate drilling fee — have slowed job growth and driven up property taxes. It is too early to know whether layoffs in 2012 will match the thousands experienced in 2011, but the news continues to trickle in that school districts are looking to raise property taxes and cut more staff in the year ahead.

• Joseph Cress, Carlisle Sentinel — CVSD taxpayers show support for tax hike:

It’s not very common for property owners to come before a school board asking their representatives to vote in favor of a tax increase, but that’s exactly what happened Monday night at the Cumberland Valley School Board meeting.

“The bottom line is we are in a bad spot,” Beth Herbster said Monday as she urged the members to hike the millage in the district by 1.7 percent.

From the start, she explained how her family has not seen a salary increase in years and does not have a lot of extra money to spare. Yet maintaining a quality education for current and future students is worth having to pay more in taxes, Herbster said.

Board members voted Monday 6-2 in favor of the preliminary $100 million budget for 2012-2013 that calls for an increase from the current 8.57 mills to the proposed 8.715 mills. Final approval of the budget could come in late April.

• Adam Clark, Allentown Morning Call — Reductions on the table for Easton Area School District:

Districtwide staff reductions may be “inevitable” if Easton Area School District wants to balance its 2012-13 budget, Chief Operating Officer Mike Simonetta said Tuesday.

Simonetta made the remark after a Finance Committee meeting in which some school directors balked at his suggestions to raise taxes and dip into district savings to close a projected $7 million deficit.

The $7 million hole assumes the board levies a 2.2 percent property tax increase, the maximum allowed by the state. The deficit swells to more than $9 million if the tax rate remains flat.

About 90 percent of the district’s budget is fixed and can’t be reduced without cutting staff, Simonetta said. Most of the remaining line items, including supplies, have already been reduced to 2009-10 levels.

Rising crime appears to be driving a Harrisburg neighborhood to pay additional property taxes in order to fund additional police protection.

• Matthew Kemeny, Harrisburg Patriot-News — Midtown Harrisburg group says additional property tax would fund police protection the city can’t afford:

The proposal, which would be the first of its kind in Pennsylvania, calls for homeowners to pay a 10th of one percent and business owners to pay a 15th of one percent of their assessed property value, with a minimum of $60 per year.

Since a majority of the roughly 4,000 properties in midtown have an assessed value of less than $60,000, many people would pay the minimum, which works out to $5 a month.

With the recession and bad policy choices at the state level driving up local property taxes, you can bet that policymakers will be paying a lot more attention to property taxes in the next couple of years.

• Eric Boehm, PA Independent — Plan swaps Pa. property taxes for sales, income taxes

A blog post by Mark Price, originally published at Third and State.

What a difference an election year makes. Last year was full of pointless brinksmanship over federal policy issues that will take several decades to solve. Those battles at times looked like they threatened the near term health of the economy.

The New Year is shaping up to be very different. The New York Times reports this morning that a deal has been struck to extend the payroll tax reduction and extended unemployment benefits through the end of the year. Tentatively, it looks as if efforts to weaken the unemployment insurance system have been blocked. Both the payroll tax reduction and extended unemployment benefits were set to expire at the end of February, and the failure to extend them was on most economists’ lists of things that could weaken the economy in 2012.

• Jennifer Steinhauer, The New York Times — Tentative Deal Reached to Preserve Cut in Payroll Tax

The Allentown Morning Call reports that an effort to weaken Pennsylvania’s prevailing wage law appears to have stalled. There is little evidence that the presence or absence of prevailing wage laws raise public construction costs. There is, however, abundant evidence that repeal of these laws lowers the wages of construction workers. Read more here.

So why the effort to weaken the law? It is about catering to owners and executives of contractors who pad their pockets by paying workers’ poorly.

• John Micek, Allentown Morning Call — Prevailing Wage Bill Collapses In The House: Republicans Can’t Muster Votes

Governor Tom Corbett, meanwhile, is touring the state to promote his 2012-13 budget.

• Kathy Boccella, The Philadelphia Inquirer — Corbett defends cuts in Pa. higher-education budget

Corbett insisted to reporters during his tour of the high-tech Siemens Medical Solutions plant that his 2012-13 plan for a steep new cuts in state aid to higher education — including 30 percent less money to state-backed schools such as Pennsylvania State and Temple Universities — could be dealt with by reducing campus operating costs, not by raising tuition…

“A lot of people are upset at spending at that level, but that’s all the money that we have,” he said, reiterating his vow not to raise taxes…

He argued that the state had to be run more like a private business — like Siemens, in fact — to create more jobs and cut costs.

“We can’t continue to raise our prices,” he said, referring to college costs. “If Siemens kept increasing prices, they would make themselves uncompetitive.”

Speaking of “all the money that we have” and running the government like a “private business” that gives away its services for free even when it has no idea whether the benefits of that policy exceed the costs … Governor Corbett has signed into law an extension of Keystone Opportunity Zones.

• Kent Jackson, Scranton Times-Tribune — Governor approves KOZ extension

Gov. Tom Corbett on Monday signed a bill extending for 13 years the Keystone Opportunity Zones program that exempts businesses from paying many state and local taxes.

Exemptions run for up to 10 years, but the bill lets companies enroll through the end of 2015 so the program now will run through 2025…

While KOZs started in 1999 to promote the use of distressed lands and run-down properties, lawmakers and observers noted instances in the early years of the program where companies enjoyed the tax benefits without investing in properties or creating jobs.

Finally this morning, we have lots of news on the impact of economic austerity around the state. For starters, school districts in Cumberland County are moving to balance their budgets by raising fees, and the Lancaster School District faces a budget shortfall.

• Roger Quigley, The Patriot-News — Mechanicsburg schools enact fees for extracurricular activities
• Ed Komenda, The Patriot-News — Cumberland Valley School District considers making students pay to play sports
• Brian Wallace, Intelligencer Journal/Lancaster New Era — School District of Lancaster faces up to $6M in cuts

The Philadelphia City Controller has issued a grim warning about the Philadelphia School District’s financial future.

• Martha Woodall, The Philadelphia Inquirer — Butkovitz report warns of schools’ funding problems:

As expected, City Controller Alan Butkovitz included a warning Tuesday about the Philadelphia School District’s finances in a report that could result in higher borrowing costs for the district.

The comprehensive annual report, sent to bond-rating agencies and bondholders, includes a paragraph expressing reservations about the district’s financial viability.

The school district, the controller’s office said, “has experienced continued operating funds losses, is projecting significant budget shortfalls for fiscal years 2012 and 2013, and is uncertain about its ability to achieve cost savings and obtain additional funding to overcome these budget shortfalls. These conditions raise substantial doubt about its ability to continue as a going concern.”

And social service agencies in Northeastern Pennsylvania are bracing for cuts.

• David Singleton, Scranton Times-Tribune — Agencies stewing over budget cuts:

The week that area social services agencies have had to chew on the cuts in Gov. Tom Corbett’s proposed 2012-13 budget has not made them any easier to swallow.

Amid still-unanswered questions over how a 20 percent smaller pool of funding within a revamped Human Services Development Fund will be distributed at the local level, critics say the one certainty is children and people with disabilities will be among those bearing the brunt of the cuts.

“It’s going to take through the year to find out who really are going to be the victims here,” Michael Hanley, executive director of United Neighborhood Centers of Northeastern Pennsylvania, said Tuesday. “Certainly, what we do know is it is going to be the most vulnerable. That is a given.”

A blog post by Mark Price, originally published at Third and State.

Lancaster Rep. Mike Sturla was quoted in Capitolwire (paywall) on a Pennsylvania Department of Public Welfare (DPW) proposal to limit access to SNAP, or food stamp, benefits to households with fewer than $5,500 in assets:

“We’re going to take the concept of the safety net and flip it and tell people they have to impoverish themselves before they get the benefits.”

This quote caught the eye of the Commonwealth Foundation’s Nathan Benefield, who noted in response:

Just to make sure I wasn’t misunderstanding the outspoken representative, I Googled the definition of impoverish and came up with “To reduce to poverty; make poor.”

Indeed! Welfare programs like food stamps were designed to help poor people, and the administration’s policy will work to ensure it serves only poor people.

As I often tell interns and students, Google is a powerful tool, but it’s only as powerful as your own understanding of a policy debate. A key concern with the DPW’s asset test, as Rep. Sturla correctly notes, is that it could potentially force low-income families who have experienced a job loss or a serious illness to spend down their meager assets in order to qualify for food assistance. Forcing hungry low-income families to spend down their savings makes them more vulnerable to having unexpected expenses that could trigger a mortgage default, eviction or loss of access to transportation. In other words, the less savings a family has, the greater the risk that an unexpected bill will make it harder for them to get back on their feet and off of public assistance.

The Pittsburgh Post-Gazette noted Thursday that the DPW expects some 4,000 people to be denied SNAP benefits and the people impacted appear to have little resemblance to the millionaires and billionaires that fund the Commonwealth Foundation.  Surely, there is a way to prevent instant lottery millionaires from collecting SNAP benefits that doesn’t also include making little old ladies go hungry.

• Karen Langley, Pittsburgh Post-Gazette — Pa.’s food stamp asset test will be easier than planned:

A total of 4,000 households are expected to lose their food stamps under the revised proposal by the state Department of Public Welfare…

In Pennsylvania, people can access SNAP if they make 160 percent of the federal poverty level or less. For a family of four, the poverty level is $22,350…

Mr. Sturla said the proposal would discourage poor people from saving.

Karen Naeser, 63, of Richmond in Tioga County, said her assets surpass the level that would disqualify her from food stamps. Ms. Naeser, who is disabled, began receiving food stamps this summer after losing her job as a receptionist at a personal care home. She said she has more than $9,000 in stocks and uses her savings to pay her taxes.

“I’m going to have to dip into the money, and then after it’s gone, what am I supposed to do?” she said. “What am I supposed to do when something happens to the furniture, the hot water heater?”

A director of Just Harvest, a Pittsburgh organization that addresses poverty and hunger in Allegheny County, said the proposal would make it harder for poor people to weather such unexpected bills.

“The kinds of emergencies middle-class people use their savings on make poor people destitute,” said Ken Regal, co-director of the organization. “What the asset test fundamentally says to poor people is unless you’re risking destitution, we don’t believe you really need help.”

In other news this morning, the Philadelphia School District is expected to layoff 90 police officers today.

• Kristen A. Graham, The Philadelphia Inquirer — Phila. School District said to cut 90 police officers:

With a $61 million shortfall to bridge by the end of June, the Philadelphia School District will let go about 90 school police officers Friday, according to a source familiar with the plan.

Finally, a handy graphic of proposed property tax increases in Lancaster County (full story here).

A blog post by Mark Price, originally published at Third and State.

Tonight President Obama will deliver his State of the Union Address to Congress. We are expecting the President to recommend an extension through the end of 2012 of extended unemployment insurance benefits and the payroll tax credit. It looks as though a major theme in the address — besides the catch phrase “built to last” — will be conventional policies aimed at reducing inequality, such as increased spending/tax credits for education and training.

Education and training are important and fruitful means of reducing inequality, but they fall well short of what’s needed to reduce the degree of inequality we now face.  A more forceful step in the direction of reducing inequality would include raising the minimum wage and making it easier for workers to form and join unions. We don’t expect to hear the President call for either of those changes.

The President will propose paying for his new initiatives with higher taxes on wealthy households. As with education and training, restoring some sense of fairness to the tax code is a laudable goal but longer-lasting reductions in inequality will only come from policies that allow the pre-tax wages of more Americans to rise as the size and wealth of our economy grows.

• Tracie Mauriello, Pittsburgh Post-Gazette — Obama to target economy in State of the Union address tonight:

Manufacturing, energy, job training and middle-class growth will be the cornerstones of President Barack Obama’s speech tonight as he takes to the nation’s grandest political stage for the annual address on the state of the union, according to senior advisers.

We are slowly getting details of a settlement of allegations of fraud by banks during the housing bubble. Dean Baker notes this morning that the deal is said to include immunity from prosecution for banking executives in exchange for mortgage relief paid for by investors (not the banks). It’s good to be a banker.

The Philadelphia Inquirer reports this morning that the association that represents construction contractors who mainly compete for work in the non-residential construction sector is expecting essentially no change in the number of workers they will employ in 2012. Non-residential construction makes up roughly two-thirds of all construction employment in Pennsylvania. Also of note in the article: 62% of Pennsylvania contractors surveyed reported relying on some stimulus-related work. Remember that factoid next time you hear someone claim stimulus spending had no effect on the economy.

• Jane M. Von Bergen, The Philadelphia Inquirer — Construction industry expects more jobs, but only a few:

Construction employment will go up — very slightly — in 2012, contractors predicted in a survey released Monday by the Associated General Contractors of America…

The survey notes that many contractors relied on stimulus-funding projects over the past years, but few expect to perform much stimulus-funded work in 2012.

In Pennsylvania, for example, 62 percent of those surveyed had stimulus work, with most of them assigning the majority of their workers to those projects. But in 2012, only one in five expects stimulus work.

More news of property tax hikes, teacher layoffs and larger class sizes — this time out of Dauphin County.

• Marijon Shearer, Patriot-News — Central Dauphin School Board approves a $155.4 million preliminary budget for 2012-13:

The Central Dauphin School Board Monday night approved a $155.4 million preliminary budget for 2012-13 that could mean higher taxes, larger class sizes or furloughs of as many as 50 district employees.

The Patriot-News Editorial Board notes that the asset tests for food stamps proposed by the Corbett administration are unwise and likely to punish many rural families.

• Patriot-News Editorial Board — This test is no asset: Planned changes in food stamp eligibility penalize people struggling financially:

Creating an asset test for food stamps in Pennsylvania is the wrong approach…

Given the economic woes many families are facing with at least one parent — sometimes both — out of a job, the car rule hardly makes sense. This is especially true in rural parts of the state. Reliable transportation is critical to achieving financial independence, and in many families that means parents having two decent cars to drive.

The other issue is the $2,000 limit in savings. Families struggling to get out of poverty are likely to be trying to save money, build up funds to help them pay off bills, make a security deposit on an apartment or catch up on mortgage payments. It makes no sense to compel people to potentially liquidate funds to be able to put food on the table.

Hunger is a problem in our state, and many people rely on food stamps to solve it.

A blog post by Mark Price, originally published at Third and State.

On Thursday, the Pennsylvania Department of Labor and Industry released data on employment and unemployment in December. Compared to the summer months, the top line numbers were good, with unemployment falling three-tenths of one percent to 7.6% (U.S. rate is 8.5%).

Nonfarm jobs were up 6,500, which is a pretty good number (we need to average 8,000 new jobs a month to get back to full employment in three years). Service-sector job growth in December was atrocious; the sector added just 300 jobs. Most of the month’s job growth was in durable goods, with manufacturing adding 2,600 jobs, construction adding 3,000 and mining adding another 600.

Those 3,000 construction jobs don’t represent a sudden resurgence of the construction industry. As most of you are happily aware, December was quite warm; this meant construction activity in the month was above historical averages which shows up as job growth in the final numbers. The actual trend in construction employment is at best no or very slow growth.

The bottom line is that in the last 12 months, Pennsylvania added 59,200 jobs. That’s fewer jobs than were added from December 2009 to December 2010 (63,900). The primary reason Pennsylvania added fewer jobs in 2011 than it did in 2010 is the loss of 19,800 jobs in the public sector.

• Ann Belser, Pittsburgh Post-Gazette — Jobless rate falls, Pa. still bests U.S.

So what do we have to look forward to in 2012? More teacher layoffs, declines in the quality of public education and rising property taxes.

• Kristen A. Graham, The Philadelphia Inquirer — SRC revamps school leadership as fund crisis worsens

Facing a fiscal crisis of previously unimagined proportions — it must cut $61 million by June and isn’t sure how to get there — the Philadelphia School District’s governing body on Thursday tore up its leadership structure and named a “chief recovery officer” to get the battered organization through the next six months.

Monica Von Dobeneck, Patriot-News — Preliminary West Shore School District budget cuts Latin, middle school languages, many librarians

Stephanie Kalina-Metzger, Patriot-News — Hummelstown taxes to increase

Residents will see a 17.5 percent property tax increase under the borough’s 2012 budget, which was passed Thursday night.

Now for some good news for construction and manufacturing employment in the midstate! ArcelorMittal is going to make an investment in its Steelton plant that will extend the plant’s life by keeping it cost efficient. And as we have said time and time again, now is the best possible time to undertake large construction projects since the construction labor market is very weak.

• Diana Fishlock, Patriot-News — Steel plant to begin $54 million upgrade this month

ArcelorMittal, which owns the steel plant along the Susquehanna River in Steelton, will begin work this month on a multi-million dollar furnace upgrade that will take 18 months to install, Steelton’s mayor, Tom Acri said.

A blog post by Mark Price, originally published at Third and State.

Yesterday, Pennsylvania’s new Independent Fiscal Office (IFO) held a conference to release its economic and budget outlook for the next five years (PDF).

The event included presentations from staff at the Philadelphia Federal Reserve, IHS Global Insight, the Bureau of Economic Analysis and the National Conference of State Legislatures.

Several of the presentations noted that Pennsylvania’s job growth weakened over the summer primarily due to substantial layoffs of teachers and other state and local workers. The director of the IFO, Matthew Knittel, very cautiously predicted that state and local layoffs are at an end.

• Mary Wilson, WITF — State’s independent economy-watchers say modest growth ahead

For Matthew Knittel, the IFO’s director, the question is: has the state moved past that end-of-year period of weakness?

He said it appears so — the third-quarter poor showing was due to state and local government layoffs, which appear to have stopped.

“The most recent data that we see now going through December suggests that the layoffs at the state and local level have abated,” said Knittel.  “So we think they’ve stopped hemorrhaging jobs.”

The keyword in Knittel’s statement is “hemorrhaging.” Job losses in local governments are most certainly going to continue over the next 12 months, and that’s before we even consider the potential impact of another round of state budget cuts. The 10,000 dollar question is whether the local job losses will approach the roughly 20,000 job losses experienced in the 12 months ending in November. Later today, we will get a full tally of the local job losses in 2011 as the Commonwealth releases the December 2011 job numbers for Pennsylvania. Read the rest of this entry →

A blog post by Mark Price, originally published at Third and State.

If you haven’t heard by now, a temporary two-month extension of the federal payroll tax cut and emergency unemployment benefits passed by the U.S. Senate was scuttled by the U.S. House on Tuesday. With the failure to extend both measures expected to slow the already tepid pace of economic growth, it is hard to imagine the House will not reconsider its position in the 11 days remaining before the current extensions expire.

• Jennifer Steinhauer, The New York Times — Republicans in House Reject Deal Extending Payroll Tax Cut

Pennsylvania Budget Secretary Charles Zogby gave a grim mid-year budget briefing on Tuesday that emphasized slower-than-expected economic growth as a key factor in slower-than-expected tax revenue growth. Sharon Ward of the Pennsylvania Budget and Policy Center fills in the budget details the Budget Secretary choose not to emphasize.

• Sharon Ward, Third and State — Déjà vu All Over Again: Mid-year Cuts and a Budget Shortfall on Tap for 2012:

Secretary Zogby rightly identified areas of built-in growth that will contribute to a structural budget deficit moving forward.

His analysis failed to mention how much tax cuts, both enacted and planned, will contribute to the short- and long-term problem. For example, the administration has likely under-estimated the cost of the 100% bonus depreciation policy enacted in January, contributing to the lower-than-expected corporate tax collections. (This policy allowed corporate taxpayers in 2011 to deduct 100% of a capital expense up front, instead of stretching it out over a period of years.)

The Governor’s budget guidance issued earlier this year called for $400 million more in tax cuts, which could contribute to more than half of the expected gap for 2012-13.

The combination of state budget cuts and the end of Recovery Act funding have also translated into a wave of layoffs and property tax increases throughout Pennsylvania. What follows are this morning’s layoff and tax increase news:

• Allison Dougherty, Patriot-News — Fairview Township approves 2012 budget raising property taxes 46.8%
• Daniel Walmer, Patriot-News — Steelton approves 2012 budget with 7% property tax increase
• Marijon Shearer, Patriot-News — Real estate taxes to increase 35% in Lower Paxton Township
• Liz Navratil, Pittsburgh Post-Gazette — City teachers offered buyouts: School officials say 1,200 eligible but fewer are expected to accept package
• John Huffstetler, Altoona Mirror — Huntingdon passes 2012 county budget
• Emily Opilo, York Daily Record — York council hears budget complaints: A vote on the city’s proposed budget has been postponed until next week.

It is reckless in this economic environment to pursue tax policies that reward narrow special interests and simultaneously generate additional state budget cuts. Economic conditions have already decimated local government tax collections. A new round of budget cuts required to finance tax cuts for big corporations will force local governments to pursue further rounds of both property tax increases and layoffs.

A blog post by Mark Price, originally published at Third and State.

More evidence of the lingering effects of economic austerity: Allegheny County looks headed for a property tax increase.

• Len Barcousky, Pittsburgh Post-Gazette — County council heads toward tax hike: Party-line vote restores funding for CCAC, children:

A tax hike appears likely for Allegheny County property owners next year after a county council committee recommended raising the real estate millage rate…

If the tax-rate increase to 5.69 mills is approved by a two-thirds majority of council, the owners of a property assessed at $100,000 will see their county tax bill rise $100, from $469 this year to $569 next year.

It would be the first millage increase under the 12-year-old executive-council form of government.

The New York Times this morning reports that the number of students participating in the subsidized school lunch program has risen sharply. The story is based on new data. Graphed below is older data for Pennsylvania and the U.S.

Steve Hebert, The New York Times — Line Grows Long for Free Meals at U.S. Schools:

Since 2007, the proportion of fourth graders eligible for free or reduced-price lunches through the federal government’s school meals program has increased nationwide to 52 percent, from 46 percent.

Below is a map from The New York Times story showing in which states more than half of all students are so poor they are eligible for a subsidized lunch (the darker red states). Remember this map next time a member of the business lobby tells you that economic policy in Pennsylvania should be more like economic policy in Southern states. The business lobby believes in low wages and free lunches.

A blog post by Mark Price, originally published at Third and State.

Recent commentaries by the Pittsburgh Tribune-Review’s editorial board and the Allegheny Institute in Pittsburgh offer a good lesson for why you should really try to read all the way to the end.

Both offer up critiques of the Keystone Research Center’s recent policy brief detailing the economic impact of public-sector job cuts in Pennsylvania. Here is the Tribune-Review:

What the Keystone researchers don’t say in their report, ‘Public-sector Job Losses Put Brakes on Pennsylvania’s Recovery,’ is that to increase government hiring, the state, school districts and municipalities would have to raise taxes.

The editorial above appears to be based on commentary by the Allegheny Institute which begins:

How to speed job growth in Pennsylvania? According to the latest offering from the Keystone Research Center (KRC), the Commonwealth and local tax levying bodies should raise taxes and hire more employees.

They don’t directly say ‘raise taxes’ but how else can the state, school districts and municipalities already facing budget deficits afford to keep all their employees-never mind hiring more?

Both of these quotes got one small thing correct: we don’t, in fact, call for school districts or municipalities to raise property or income taxes. Our main recommendation is that state policymakers spend more of the state’s revenue surplus. As we explain:

Pennsylvania’s 2011-12 General Fund budget made deep cuts to education and health care while leaving unspent $620 million from a revenue surplus last year and other unused funds. Our best estimate is that the failure to spend that revenue will by itself translate into the loss of 17,714 jobs (including private jobs lost due to the ripple effects of public job cuts) over the course of the 2011-12 fiscal year …

In the last year, Pennsylvania lost 21,000 jobs in the public sector. Some 13,000 of those losses were education-related jobs. Among the 50 states, Pennsylvania experienced the sixth-largest decline in state and local jobs in the last year. The concentration of public-sector job losses in Pennsylvania helps explain why Pennsylvania job growth recently has stalled relative to other states.

Seems the Tribune-Review and the Allegheny Institute missed that. In their defense, we did bury those details on page 3 of the brief.

Read to the end before unleashing your criticism, you say? Who has time for that?

On a serious note, I should add that the best way to limit further local property taxes increases and public-sector layoffs is for Congress to pass a jobs bill that includes additional aid to state and local governments. 

As a special favor to the Tribune-Review and the Allegheny Institute, the CliffsNotes version of our policy recommendations:

Pennsylvania needs a jobs policy that will strengthen the private and public sectors. There is no shortage of practical ideas for how to create jobs. Options include:

• Spending more of the state’s revenue surplus;

• Enacting a natural gas drilling tax that supports shared statewide priorities like education as well as the environment and local communities;

• Maximizing the potential for Marcellus Shale development to create jobs for Pennsylvania workers; and

• Bond-financing infrastructure, school construction and energy efficiency investments at a time when borrowing and construction costs are both low.

What is missing in Harrisburg (as well as Washington, D.C.) is the political will needed to enact effective policies to create jobs. How many more months of failed austerity economics must Pennsylvanians suffer through before we get a needed change in direction?

A blog post by Mark Price, originally published at Third and State.

The Pennsylvania Department of Labor and Industry reported Thursday that the number of jobs in the commonwealth grew by 13,800 in October, as the unemployment rate fell slightly to 8.1%. A key factor in October’s relatively good performance was a pause in public-sector job losses.

So the good news is we had one positive month; the bad news is unless we have more months like October, the labor market is more or less stuck in neutral. Back in January, we estimated that the jobs deficit in Pennsylvania was 257,000 jobs (this is the number of jobs Pennsylvania needs to get back to full employment). The October jobs deficit is just over 237,000 jobs. In other words, the pace of job growth is such that we are back to full employment in more than eight and half years.

• Ann Belser, Pittsburgh Post-Gazette — October sees slight rise in job statistics: Fewer unemployed, more positions added

Weak job growth also means less revenue for local governments. Lackawanna County is set to raise property taxes by 38%.

• David Singleton, Scranton Times-Tribune — Commissioners introduce budget with 38 percent tax hike

Paul Krugman fan boys and fan girls (you know who you are) will note that in his column this morning he is hopeful that the supercommittee will fail mainly because success now would certainly hurt the economy and only an election can properly sort out where voters stand on how best to achieve long-term deficit reduction.

• Paul Krugman, The New York Times — Failure Is Good:

Why was the supercommittee doomed to fail? Mainly because the gulf between our two major political parties is so wide. Republicans and Democrats don’t just have different priorities; they live in different intellectual and moral universes.

Speaking of different intellectual and moral universes, I came across a pair of stories in the Lancaster Intelligencer Journal and Central Penn Business Journal this morning on the shared problems of local governments.

The Intelligencer Journal story notes an effort in Lancaster County to encourage smart growth. Managing growth in a way that leads to less sprawl is good for the environment and also would help reverse the longer-term revenue and economic development problems that have forced many governments to seek state assistance through Act 47.

The Central Penn Business Journal story frames the problems facing local governments as wages being too high and too much regulation.

• Dan Nephin, Intelligencer Journal — Local officials tout ‘smart growth’ as Lancaster County’s model

Coalition for Smart Growth President Mark Hackenburg said smart growth focuses on using existing infrastructure to its greatest values.

‘So infill and growing within our existing communities is not a bad thing. Everyone benefits. There is an economic benefit to rehabilitate and reuse existing areas,’ he said. ‘We can retain the character of our communities by protecting historic resources, by protecting environmentally sensitive areas, reducing outward growth pressures on prime farmland.’

• Jason Scott, Central Penn Business Journal — Pa. begins to address third class quandary: Relief needed before fiscally challenged cities reach point of Act 47, officials, lawmakers say

The issues are nearly identical for all fiscally challenged cities — declining population and tax revenue, high pension and health care costs, blighted and tax-exempt properties and heavy debt. Other challenges include the rules of Act 111, which sets bargaining and arbitration for police and firefighters.