Sunday, November 02, 2008

A Fragmented But Interdependent Region

As we face challenging economic times, it’s tempting for citizens and public officials to worry only about what happens in their own borough, township, county, or legislative district.

But while local governments here like to be independent politically, they aren’t independent economically. Municipal governments and school districts depend primarily on residential property and income taxes for their budgets. Most of the residents who are taxed, in turn, depend on their jobs for the income needed to pay the taxes. However, those jobs are usually in a different municipality.

In the more than 500 municipalities in the 10-county region, on average, 87% of their residents work at a job located in a different municipality. In fact, at the time of the 2000 Census, there were only four municipalities in the entire 10-county region where the majority of residents worked at jobs located in the municipality where they live – the City of Pittsburgh, Indiana Borough, New Wilmington (in Lawrence County), and Waynesburg (in Greene County).

So the ability of most municipalities to provide police protection, road maintenance, and other public services depends on how successfully other communities are at creating and retaining jobs, since it’s those jobs that provide the home municipality’s residents with the income to pay their local taxes.

In this sense, like it or not, most communities in the entire region are dependent on the City of Pittsburgh. In 136 municipalities, more residents work at jobs in the City of Pittsburgh than in any other location, including their home municipality. And 93% of the municipalities in the entire 10-county region had at least one resident working at a job located in the City of Pittsburgh.

Although the City of Pittsburgh is the biggest regional employment center, it’s not the only one. For example, in 2000, nearly half of the people working in Findlay Township, home to Pittsburgh International Airport, came from outside of Allegheny County, and over half of the workers in Cecil Township (Washington County), where Southpointe is located, commuted from Allegheny County. The decisions made about infrastructure, taxes, etc. in these municipalities affect the job prospects for people in literally hundreds of other municipalities.

Is the picture any different if you talk about 10 counties rather than 548 municipalities? In terms of its residential tax base, Allegheny County is the most economically self-sufficient of any of the counties in the entire region, because 92% of Allegheny County residents work at a job located in Allegheny County. In most of the other counties in the region, fewer than 2/3 of their residents work in the county where they live. In fact, between 1/4 and 1/3 of the residents in Beaver, Butler, Washington, and Westmoreland Counties get their paycheck from an employer located in Allegheny County.

If you look at it from the perspective of businesses, however, they draw their workers from a broad geographic area, and to them, government boundaries are an impediment, not an asset. Even in Allegheny County, employers depend on residents of every other county in the region to fill more than 1 out of every 5 jobs. In most of the other counties in the region, between 1/4 and 1/3 of the jobs are filled by workers who commute from a different county. Fayette County is actually the most self-sufficient county in the region in terms of workforce, since 84% of the jobs in Fayette County are filled by Fayette County residents.

Our interconnections extend across the state line, too, although they’re not nearly as strong as those within the 10-county southwestern Pennsylvania region. Over 14% of the residents of Hancock and Brooke Counties in West Virginia (where Weirton and Wellsburg are located) work in southwestern Pennsylvania, primarily in Allegheny, Beaver, and Washington Counties. Nearly 11% of the residents of Greene County work in West Virginia (primarily in Morgantown).

What does all this mean for us, particularly with tough economic times ahead? First, no matter where a business is located, it will need to draw on workers throughout the region to fill those jobs. So we need high-performing schools in every one of our school districts; we need regional, not local workforce training systems; and we need transportation systems that connect our communities effectively. Second, it makes no sense for our communities to be competing with each other for businesses and jobs. A company that locates or expands in one community is likely to provide jobs that support the tax bases in many other municipalities, so the only real “loss” is if the business locates in another region entirely. And finally, with limited funding for infrastructure and economic development programs, we need to pool our resources and invest in the most strategic opportunities for the region as a whole.

(A shorter version of this post appeared in the Sunday, November 2 Pittsburgh Post-Gazette.)


Anonymous Anonymous said...

live close to where you work. a stress-free commute day in and day out goes a long way in affecting your quality of life, and your outlook on life.

10:07 AM  

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