Policy Points: Quick Facts from the Commonwealth Foundation

Member Group : Commonwealth Foundation

August 11, 2009

Today, the Commonwealth Foundation released two new Policy Points highlighting Pennsylvania’s state and local tax burden and state and local government debt, in light of ongoing proposals to increase taxes and issue more bonds for "economic development."

How Do Pennsylvania Taxes Stack Up?


Tax Freedom Day is the day of the calendar year when Americans have finally earned enough money to pay all of their federal, state, and local taxes. The following table shows the dates to which Pennsylvanians had to work in 2009 in order to foot the bill.

• In 2009, Pennsylvanians worked 104 days—January 1 to April 14—just to pay their tax bill.

o Federal, state, and local taxes consume 28.5% of Pennsylvanians’ income (41% if federal deficit spending is added to the mix)

o Overall, Pennsylvanians will spend more of their income on taxes than they will on food, clothing, and housing combined.

o Pennsylvania has the 11th latest Tax Freedom Day in the nation.


While Tax Freedom Day considers all taxes, much of the variance amongst states is based on differences in federal taxes paid (which would vary with average incomes). State and local taxes, however, also vary greatly among states.

• Pennsylvania taxpayers pay $4,463 per capita in state and local taxes, 10.2% of their income, as opposed to the national average of only 9.7%.

• Pennsylvania has the 11th highest state and local tax burden.

• Pennsylvania ranks in the top 20 in state and local total taxes, spending, property taxes, income taxes, corporate taxes, and debt per capita.

Source: Tax Foundation

Click here for the complete
"How do Pennsylvania Taxes Stack Up"

Pennsylvania State Debt

• Under Governor Rendell, total state general obligation debt outstanding has increased from $6.8 billion to a projected $9.5 billion with his 2009-10 budget proposal, a 40% increase in seven years.

• Annual payments on general obligation bonds have increased from $349 million in 2002-03 to $942 million in Gov. Rendell’s proposed budget, nearly two-and-a-half times the cost when he took office.

• While Pennsylvania’s "state debt" outstanding has increased 40% from Dec. 2002 to Dec. 2008, the amount owed by "state agencies and authorities"—which represents two-thirds of debt at the state level—increased 86%!

Source: Governor’s Executive Budget

• Pennsylvania taxpayers owe far more when local government debt is taken into account.

o Pennsylvanians owe $115 billion in state and local government debt.

o That debt amounts to over $9,000 for every resident of Pennsylvania, or over $37,000 for the average family of four.

Click here for the complete "Pennsylvania State Debt"

For additional information on the State Budget and other issues, go to www.CommonwealthFoundation.org, or call 717.671.1901.

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The Commonwealth Foundation is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.