Independent Fiscal Office Offers First Report

Jan 20, 2012

Pennsylvania's Independent Fiscal Office is linking the state's poor economic showing at the end of 2011 to state and local government job layoffs. The opinion is part of the group's first report.

On the up side, the health care sector in Pennsylvania, among the largest in the country, is showing job growth, and those positions could multiply according to IFO director Matthew Knittel. He said the group is still trying to get a good handle on trend lines. "Clearly there're some repetitive themes. We've seen weakness in the third quarter of 2011 and the question now is have we moved past that and left that weakness behind," Knittel said.

One trend he does see is the growth of the elderly population, which he said could cause public welfare spending to increase. "Potentially, it depends on how the commonwealth responds to it," said Knittel. "The revenues drive the expenditures, so we're not sure. Our job here was to present the situation if left unchanged, if we took our policy from 2011-12 forward, what does the fiscal situation look like?"

The independent economy watchers were legally required to submit their first report this month. The goal is to provide unbiased information to state lawmakers including five-year trends.