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Page 64

Pennsylvania

Tom Ridge, Republican

Legislature: Republican

Took Office: 1/95

Grade: B

Pennsylvania has benefited tremendously from the fis-

cally conservative, tax-cutting agenda of Tom Ridge.  The

Commonwealth Foundation, a state think tank, says, "Ridge

and the legislature have enacted the most pro-business--and

pro-economic growth--reforms in recent Pennsylvania history.

These reforms were desperately needed."  They include $2

billion in corporate net income and personal income tax

cuts, a job creation tax credit, inheritance tax relief,

elimination of the 6 percent sales tax on computer services,

workers' compensation reforms that will cut business costs

by an estimated 20 percent ($1 billion a year), electricity

deregulation, and welfare reforms that have cut caseloads by

65,000.  Ridge has cut taxes in each of his first four years

in office.  He recently endorsed an amendment to the state

constitution requiring a 3/5 supermajority vote of the leg-

islature to raise taxes.  Spending growth has also been cut

to half of what it was under the previous administration.

The result of all these reforms has been an economic revival

of sorts in Pennsylvania.  The unemployment rate is below 5

percent for the first time in 30 years, and 230,000 new jobs

have flocked into the state.  From 1995 to 1998 Pennsylvania

impressively leapfrogged from 45th in the country in job

creation to 17th.  Alas, there are blemishes on Ridge's rec-

ord as well.  Last year he supported a hefty gas tax and mo-

tor vehicle tax increase.  His latest budget, described ac-

curately by the Philadelphia Inquirer as "a fat election

year budget . . . that spreads the wealth far and wide," is

by far his worst.  Ridge also seems more enamored with

smokestack-chasing industrial policy initiatives than with

further cutting Pennsylvania's business taxes, which are

still about one-third higher than in the average state. But,

on balance, Ridge, who arrived in Harrisburg from Washington

with a mushy moderate reputation, has been a very pleasant

surprise.

Score

Grade

Rank

Overall Fiscal Policy Score

56

B

13

Spending Score

61

B

14

Revenue and Tax Rate Score

54

B

12

Amount

0.7%

Average Annual Change in Real Per Capita Direct General Spending through 1996

-1.5%

Average Annual Change in Direct General Spending Per $1,000 Personal Income through 1996

-0.3%

Average Annual Recommended Change in Real Per Capita General Fund Spending through 1999

-2.3%

Average Annual Change in General Fund Spending Per $1,000 Personal Income 1996-98

0.5%

Average Annual Change in Real Per Capita Tax Revenue through 1997

-2.0%

Average Annual Change in Tax Revenue Per $1,000 Personal Income through 1997

-3.3%

Average Annual Recommended Change in General Fund Revenue Per $1,000 Personal Income through 1999

0.4%

Average Annual Change in Real Per Capita General Fund Revenue 1996-98

-0.1%

Average Annual Recommended Tax Changes as % of Prior Year's Spending through 1999

0.0

Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)

0.0

Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)

12.8

1998 Combined Top Income Tax Rates (Personal plus Corporate) (*0.5)

0.0

Change in Sales Tax Rate, proposed and/or enacted (% points)

3.5

Change in Gas Tax Rate, proposed and/or enacted (cents per gallon) (*0.5)