2020 Year in Review

Member Group : Allegheny Institute

(December 30, 2020)– Without question 2020 is a year most people will be glad to see depart. It was definitely unique in its impact on our lives and the economy.

To be sure the depression of the 1930s was horrendous in its economic devastation and hardships it created for millions of Americans.  World War II was a long period of sacrifice and adversity suffered by millions of members of the armed forces and on the home front with rationing and constant worry about loved ones overseas in harm’s way.

We went through a seemingly endless conflict in Vietnam that was very divisive for the country.  And we have suffered dreadfully on many other occasions such as the terror attacks on Sept. 11, 2001, and the aftermath.

We also have seen enormous tragedies from epidemics of polio and the Spanish flu, hurricanes, tornadoes and earthquakes.  Then, too, there have been more recent economic setbacks such as in 2008 when there was a near-crash of the financial system owing to the subprime mortgage debacle.

But the damage of Covid-19 on the psyche of Americans and its impacts on the workplace will be felt for years in ways we cannot yet contemplate. With good policies and leadership, we will eventually get past most of the economic ruin the virus created.  But the emotional and psychological damage from shutdown orders, stay-at-home orders, suppression of church attendance, cancelation or dramatic limitations on attendance at weddings, and sparsely attended, or no in-person attendance at, funerals and memorial services will persist for a long time.

These losses of celebration and lack of proper memorialization of lost loved ones can never be completely made up. There is no way to know the long-term impacts on school-aged children of the isolation, the mask-wearing and constant bombardment about the risks of getting the disease or giving it to a loved one, remote learning and lack of normal interactions.

The year 2020 surely is one to put behind us as quickly as possible.  But when the putting behind us begins to happen in earnest remains unclear.

As a policy research organization and advocate of free-market economics, low taxes and small government, the Allegheny Institute has, since the arrival of the virus, been keenly interested in the economic impacts of the disease and the state lockdowns and limitations placed on many businesses and individual freedoms. Much of our research and many Policy Briefs over the past 10 months have examined and analyzed the effects of the virus on payroll jobs, unemployment and government tax revenue—state, county and city.

Our Briefs also looked at the revenue school districts, the Turnpike Commission and casino gaming lost as well as the massive decline in passengers at Pittsburgh International Airport and at the Port Authority.

By business sector, full-service restaurants, hotels, drinking places and entertainment and recreation were very hard hit and some remain depressed compared to a year ago. Health services and retail, other than big box stores and groceries, saw major job losses initially but have recovered significantly. Personal services were also hard hit. Unfortunately, of late, a resurgence of cases threatens to disrupt the recovery once again.

Notably, the Policy Briefs pointed out that very few government workers have been laid off despite revenue declines not offset by federal bailout dollars. Indeed, jobs at major authorities including the airport and the Port Authority were also fully maintained despite enormous declines in passengers. In early 2020, before the pandemic pummeled air travel, a Policy Brief found that growth in domestic passengers had slowed dramatically in 2019 compared to 2018 and 2017 and that the international passenger count tumbled 16.3 percent from 2018. Of course, international travel has been at a virtual standstill for most of 2020.

Although the impacts of the coronavirus occupied much of the Institute’s time and effort, the work was in no way limited to the virus. Policy Briefs covered many other important topics.  The dramatic problems of enrollment losses and financial problems at the 14 schools in the Pennsylvania State System of Higher Education (PASSHE) were discussed in three Briefs along with suggested solutions and evaluations of the systems’ board of governors proposed consolidations and degree program reductions.

These important remedial actions were recommended by Policy Briefs over two years ago but were found to be unwarranted and inadvisable by a very expensive study commissioned by the board. That study unquestionably delayed the board and Legislature’s decisions to act and made the necessary changes even more drastic.

Then, too, the Institute’s earlier work on the Regional Greenhouse Gas Initiative (RGGI) that pointed to very serious flaws in the plan was adapted for presentation as legislative testimony at the request of the Legislature.

An Institute analysis of office vacancy rates in downtown Pittsburgh, that had risen before large numbers of employees began working from home due to the virus, pointed to the prospect that many will continue to work from home after the pandemic leading to even higher office vacancy rates and a glut of space that could lower rental rates and building values.  That in turn will lead to assessment appeals and a lower property tax base for the city, county and Pittsburgh Public Schools.

A recent Policy Brief found that a reduction of millions of dollars in assessed value for commercial properties could be just a harbinger of what is to come if vacancies continue to be high or worsen.

Once again, as has been the case for over a decade, it fell to the Institute to demonstrate the fallacious and unwarranted condemnation of air quality in the Pittsburgh region by the American Lung Association. The entire Pittsburgh seven-county metro area-Weirton-New Castle region is labeled as unhealthy in its particulate matter concentration because of one monitor in the Mon Valley. No other monitors in the region were out of compliance with EPA standards and the overall level of particulate matter in the region has fallen dramatically over the last two decades.

Many counties that do not even have monitors are condemned for having dirty air simply because the EPA chooses to include them in the so called “attainment region” with Allegheny County and its one offending monitor.

A February Policy Brief discussed the advent of online gaming in Pennsylvania. Online gaming turned out to be very important for the industry as revenue from those games helped soften the blow of casino closures from mid-March to mid-June and limitations on the number of in-casino players after the reopening.

The Institute constantly maintains a sharp focus on government policies and orders that negatively impact businesses. A big push of late has been an ordinance imposing a sick leave requirement on private businesses in Pittsburgh. An ordinance that a bizarre Supreme Court ruling affirmed by accepting the city’s argument that it was a public health issue. This after all lower courts had ruled against the city and its appeals.

Now Allegheny County is talking about a similar law. It is a law that is clearly another indication of the anti-business sentiment that many on the County Council hold. If passed this law will hurt the county relative to its neighbors. And it is especially egregious in light of the many tens of thousands of county residents who remain unemployed during the Covid pandemic.

Looking ahead at 2021, the Allegheny Institute, with its 25-year track record of standing firm for the principles of free market economics, individual liberty, small government and low taxes, renews again its long-held commitment to analyze and comment on the issues and policy proposals that have large effects on business formation and growth, taxes paid by individuals and the cost of governments, authorities and public schools.  The Institute will advocate strongly for good policies and push back equally strongly against bad policies.

And as 2020 comes to a close, we wish all our readers and their families a Happy New Year and a very safe, prosperous and healthy 2021.

Jake Haulk, Ph.D., President-emeritus

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