In its first five-year economic forecast since the beginning of the COVID-19 pandemic, the state’s Independent Fiscal Office predicted that Pennsylvania’s General Fund will run structural deficits over the next five years. With this fiscal year being the sole exception due to federal aid and other cash infusions, the state will experience structural deficits upwards of $2 billion through 2026, with the deficit projected to grow to $2.6 billion by 2023 before settling at $1.9 billion at the end of the 2025-26 fiscal year.
The IFO report also highlighted the state’s continued struggle to retain school-age and working-age citizens, with both of those populations expected to decrease in the coming years. The IFO report says it will take the state approximately six years to mount a full recovery of the jobs lost due to the COVID-19 pandemic.
The IFO report also highlighted how the COVID-19 pandemic has impacted the state economy in the last year, particularly in regard to job losses. The hardest-hit sectors have been restaurants, colleges and universities, retail and clothing stores and air transportation sectors — all of which are likely going to experience permanent job losses, according to the IFO’s analysis.
The full IFO report can be read here.