HARRISBURG — Pennsylvania’s “silver tsunami” of retirees outpacing workers isn’t only a population shift: it’ll also drive up the tax burden.
With fewer youth and working-aged adults spread among the population, and a larger proportion of elderly Pennsylvanians, the demand on government services is expected to increase in the long run.
“The burden of support will fall on a smaller group of taxpayers,” the Independent Fiscal Office noted in a recent report on the commonwealth’s demography. “The actual contraction of the working-age cohort suggests that real per capita tax levels for that age group must increase to keep pace with the anticipated increase in demand for healthcare and other services.”
The problem isn’t new — the IFO has warned of workforce problems in the state before, and Treasurer Stacy Garrity warned of long-term budget shortfalls in March. But it’s a wake-up call for legislators as they consider the state’s budget and the governor works on a master plan for aging in the commonwealth.
The IFO expects population growth to be flat in the near term and fall slightly in the long term. But the numbers of school-aged children are expected to fall 3.2% in the near term and 3.5% in the long-term, as are the numbers of working-age adults (2.6% near-term, 1.7% long-term).
Yet the IFO expects retirees to go up 13.4% in the near term and 3.4% in the long term, and advanced-aged Pennsylvanians (age 80 and up) to increase 8.2% in the near term and 20.8% in the long term.
“By 2030, about 35% of all older adults in the Commonwealth will be part of the retiree cohort,” the IFO report noted.
Though the state is on the positive side of net migration (with estimates of 91,000 people moving in from 2025 to 2030), it won’t make up for Pennsylvanians who pass: The IFO expects 111,000 more deaths than births during that same time.
Some parts of the state may be better off than others: most population gains have gone to the southeast, while the northwestern parts of Pennsylvania have struggled to keep its population level.
PA. AMBULANCE REIMBURSEMENTSEmergency service agencies across Pennsylvania have warned of funding shortfalls and labor shortages, but a recently passed bill will help ease a fraction of the pain.
House Bill 1351, signed into law this week as Act 15, will require Medicaid to reimburse EMS agencies for every mile an ambulance travels with a patient. Previously, no payment would be made for the first 20 miles of travel.
Passed by the House in June, the bill aims to help EMS companies steady their financial footing — a tall order.
Though local governments are required to provide EMS services by state law, they are not required to fund it. The result is companies unable to recover the cost of running an ambulance in an emergency and low wages for paramedics and other workers.
Rural areas especially feel the financial burden. Some agencies have seen their required coverage area expand without extra funding to compensate for it. No call — no matter how minor the medical concern — can be denied.
“Emergency service providers are reimbursed for mileage, but the rates at which they are compensated are significantly insufficient for rural companies which are forced to travel greater distances,” Rep. Jim Struzzi, R-Indiana, said in a statement.
The problem is not new, but has lingered for years, whether it be free-riding townships or problems recruiting workers.
When EMS agencies fold, the financial burden they leave behind can be significant. Jeannette EMS, east of Pittsburgh, filed for bankruptcy this year and leaves behind $850,000 in unpaid debts.
