The Pennsylvania Promise: Making College Affordable and Securing Pennsylvania's Economic Future

Authors: 
Diana Polson
Authors: 
Mark Price
Authors: 
Stephen Herzenberg
Publication Date: 
January 23, 2018

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Executive Summary

Three recent briefs by the Keystone Research Center laid out the case for more affordable access to post-secondary education in Pennsylvania. The global race for raising incomes and increasing opportunity hinges critically on access to post-secondary education and training. If Pennsylvania does not expand access to higher education to more of its citizens, the Commonwealth’s economy will suffer and living standards will lag behind growth elsewhere. With a modest and smart investment, Pennsylvania can build a more prosperous future for its citizens and reinvigorate the American Dream in every corner of the keystone state. “The Pennsylvania Promise,” outlined below, shows how. 

The Need for Investment. There is a pressing need for reinvestment in post-secondary education and training in Pennsylvania.

  • Thirty-five years of state disinvestment have left Pennsylvania ranked worst in the nation when it comes to higher education, sunk in the rankings by students’ high debt at graduation and the state’s high tuition and fees, according to U.S. News and World Report.
  • The state ranks 40th for the share of adults 25-64 with an education beyond high school.
  • In over half of Pennsylvania counties (35), the share of adults with more than a high-school degree is lower than in any of the 50 states (i.e., lower than West Virginia’s 48.1%).
  • A large body of economic research shows that lagging educational attainment translates to lower wages and incomes for individuals and slower economic growth for regions.
  • The Wall Street Journal has already labeled rural America the “new inner city,” the nation’s most troubled regions. Rural Pennsylvania has so far escaped the fates of some parts of West Virginia and Kentucky. But if Pennsylvania’s rural counties remain higher education deserts, it would guarantee their accelerating decline over the next generation.

The Pennsylvania Promise. For about a billion per year, Pennsylvania could:

  • cover two years of tuition and fees for any recent high school graduate enrolled full-time at one of the Commonwealth’s 14 public community colleges;
  • cover four years of tuition and fees for any recent high school graduate with a family income less than or equal to $110,000 per year accepted into one of the 14 universities in the State System of Higher Education;
  • provide 4 years of grants ranging from $2,000 up to $11,000, depending on family income, for students accepted into a state-related University.  
  • finance the expansion of grant assistance to adults seeking in-demand skills and industry-recognized credentials, as well as college credit.

Currently per capita funding for higher education in Pennsylvania ranks 47th out of 50 states.  The increase in state spending required under the Pennsylvania Promise would raise Pennsylvania’s rank to 36th.

The Pennsylvania Promise would cost:

  • One fourth of the revenue raised from increasing the Pennsylvania personal income tax rate by one percentage point.
  • About half of the revenue raised by a progressive tax proposal that cuts the personal income tax rate on wages and interest while raising it on the income derived from wealth. This is a proposal that would lower taxes for most Pennsylvanians, including a large majority of the rural Pennsylvanians who would especially benefit from the Pennsylvania Promise.
  • Roughly the money raised by a severance tax like West Virginia’s. The added appeal of using a severance tax to fund a portion of the Pennsylvania Promise would be that many drilling regions lack a low-cost local community college, making attendance at two and four-year institutions a particularly burdensome proposition for low income students from those regions.
  • The amount raised by a 0.054 percent flat tax on financial wealth (“net worth”) – $540 annually for a taxpayer with $1 million in financial assets. Investing these revenues in the Pennsylvania Promise, thereby addressing Pennsylvania’s chronic higher education investment deficit, would increase wealth in Pennsylvania long-term. Funding this investment solely through a wealth/net worth tax paid almost entirely by the highest-income Pennsylvanians would place the burden of financing expanded access to higher education on those individuals who have benefited most from changes to tax and economic policy in the last several decades. It would also generate profound improvements in opportunity and quality of life for Pennsylvanians generally.

After running the numbers, the question that emerges is “what are we waiting for?” Anyone who cares about Pennsylvania, particularly those parts of the state underserved by affordable, accessible higher education – most of the state outside the Philadelphia metro area and parts of the Pittsburgh metro area – should be leading the charge for Pennsylvania to enact the Pennsylvania Promise.

Our Previous Work on Higher Education in Pennsylvania

  • Pennsylvania’s Great Working-Class Colleges (https://goo.gl/NHhtqn)
  • At Student’s Expense: Rising Costs Threaten Pennsylvania Public Universities’ Role in Upward Mobility (https://goo.gl/gwXphr)
  • Pennsylvania Higher Education at a Crossroads: To Boost Opportunity and Growth, Pennsylvania Needs to Invest in Higher Education (https://goo.gl/fr3cBU)

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