IssuesPA

April 1 2004

All indicators point to cities and towns that are less populated, less wealthy, and more fiscally unstable with every passing year. How will Pennsylvania's urban decline impact Pennsylvania's economic future?

(April 2004) Pennsylvania’s urbanized areas generally have been experiencing a slow but undeniably real decline. All indicators point to cities and towns that are less populated, less wealthy, and more fiscally unstable with every passing year. The most recent economic downturn may have accelerated this distress, but the trend started well before then and was evident even during the best of economic times.

In short, Pennsylvanians are moving away from urban areas. The state’s population hasn’t grown much over the past 30 years, but that doesn’t mean it’s been stationary. In 1970, 58.3% of Pennsylvania’s population lived in more urbanized cities and boroughs. By 2000, it declined to 46.2%. Even first class townships, which generally have a relatively concentrated population, didn’t maintain pace as a portion of the state’s total population. The outer suburban second class townships more than made up for the losses of the rest of the state, however, and that trend is continuing.

Change in Pennsylvania’s Municipal Population By Class of Municipality
1970 - 2000

 Municipality Type

Population Change
1970-2000 

Percent Change
1970-2000 

Percent of Total
1970 

Percent of Total
2000 

Cities 

-874,529 

-21.9% 

33.9% 

25.4% 

Boroughs

-319,531 

-11.1% 

24.4% 

20.8% 

First Class Townships 

33,598 

2.3% 

12.3% 

12.1% 

Second Class Townships 

1,647,607 

47.5% 

29.4% 

41.7% 

 Total

487,145 

4.1% 

100% 

 100%

Further, the concentration of wealth has been moving with the population. When measuring wealth by state taxable personal income at the school district level, only 10 of the 72 cities and boroughs with populations over 10,000 are in school districts that experienced higher-than-average personal income growth from 1992-2001. When using real estate market value as the measure, only 18 of these same 72 cities and boroughs grew faster than the state average. In both cases, these cities and towns are part of a larger area that may have provided the net growth. Only four of these school districts experienced above-average growth for both measures.

So what’s left behind?

It’s clear the de-urbanization of Pennsylvania isn’t just a big city problem. The exodus of people and wealth has affected most of Pennsylvania’s urbanized areas including cities, boroughs and many first class townships. The most obvious result is a declining tax base, due in part to lower property values and less residential income. In addition, the movement of population and wealth has taken retail and service markets with it, adding to the tax base loss.

While the tax base has been declining, the demand for services hasn’t declined proportionately. Infrastructure such as sewer and water systems are still there - and so is the cost of maintaining them. Those who remain often include large percentages of older and lower income people, groups that demand more public safety and social services. All of this adds to a growing cost burden.

The net result? Fiscal distress. A stagnant or declining tax base combined with the never-ending demand for government services has resulted in many cities and boroughs having problems making ends meet. That means reduced services or, in some cases, municipalities on the brink of bankruptcy.

Where do we go from here?

Population movement, patterns of wealth and fiscal distress reflect change. The root causes are many and varied - from mismanagement and waste to the consequences of individual choices and state policies. The Pennsylvania Constitution essentially has made local governments creatures of the state, which implies that the legislature maintains some level of stewardship - establishing the structures, operating rules, and financing capabilities of local governments.

Further, state laws and state agencies have indirect influence over the well-being of local governments through their policies for economic development, environmental regulation, and public safety. Overall, state government has power to establish the rules of the game for local government, and also can structure the shape and condition of the playing field.

Because issues have been building over many decades and the causes are so widespread, solutions likely won’t come easily. However, without a long-term solution, the competitiveness of Pennsylvania’s regions for jobs and people will continue to suffer.

IssuesPA has taken a closer look at the state’s cities and towns, first with a study of the City of Pittsburgh, and now with a look at the health of Pennsylvania’s metropolitan areas.