Altoona Times

After a survey of Pennsylvania voters released July 2 by the Commonwealth Foundation found that 69% of the state’s voters said inflation and price increases impacted their household’s ability to maintain their standard of living by “a great deal” or “a fair amount,” a policy expert added that a decreasing "dependency ratio" between active workers and senior citizens could create a major funding issue for long-term care costs in the years to come.

Pennsylvania is particularly impacted by the rising costs of inflation, with twenty percent of the state’s population being age 65 and over, according to the U.S. Census Bureau.

Elizabeth Stelle, Director of Policy Analysis for the Commonwealth Foundation, said the poll shows that inflation "ranks among the largest concerns" for voters, above the economy or healthcare. 

"Inflation remains a major issue, despite the fact that it’s not as bad as it was, it’s still significant. If you look at what inflation has done since January of ’21 and the beginning of the Biden Administration, we’re still hovering at a 19.2% increase in the Consumer Price Index. Folks are feeling that and when we talk about our senior citizens, folks are on fixed incomes and inflation really matters,” Stelle told Altoona Times.

“The other issue that we’re looking at for senior citizens related to inflation and the economy, is what we call the dependency ratio in Pennsylvania: Looking at the ratio of working adults to retired adults. That’s important, because retired folks use more state services, so if we had a shrinking dependency ratio, that means less resources coming into the state, fewer resources available for folks to do things like age in place and have higher quality-of-life.”

Stelle said the current "dependency ratio" is about 3.5 workers for every one senior, but by the year 2030, that ratio is expected to decrease to 2.5 workers for every one senior.

“That’s going to create a budget crunch, it’s going to weaken the amount of services available for seniors. So, that’s another issue for seniors, and it is related to inflation and the economy because, obviously, if your income is shrinking or your dollars aren’t going as far, you might become more dependent on programs like Medicaid that are primarily funded by state taxpayers,” said Stelle. 

Stelle emphasized the urgency of the situation, specifically a statewide funding issue for long-term care costs – in that the cost of such programs is growing twice as fast as revenue for them is being generated. 

“It’s only going to accelerate as we continue to age, in terms of a statewide population,” Stelle said.

Stelle added that another key factor in Pennsylvania is ongoing population shifts, specifically, the depopulation of rural areas by senior citizens – raising the question of who will care for older adults who are less likely to move from those rural areas, and putting more pressure on state finances to aid those communities.

In terms of solutions, Stelle commented that a bipartisan tax cut bill, Senate Bill 269, moved through the Pennsylvania Senate in June and offered encouragement for how the Commonwealth will proceed on this issue.

“It had two parts: A reduction of personal income tax, but for seniors, the really important piece would be elimination of the gross receipts tax. This is basically a fee that’s put on everyone’s electricity bill, so if you use electricity, you pay it, and that of course directly impacts a lot of seniors,” Stelle said.

Stelle said that in Blair County alone, eliminating the gross receipts tax would translate to county-wide savings of $11.6 million in the year 2025 alone, (and by reducing personal income tax, an additional $11 million) – the total of which would translate to saving about $450 per household in that county.

Stelle likewise provided such data for all of Pennsylvania’s counties, and said that statewide, the Commonwealth Foundation estimates the gross receipts tax savings per household for 2025 at $232.16, which of course would shift if the tax cuts called for in Senate Bill 269 are implemented later.

“The big picture is $3 billion in savings for Pennsylvania taxpayers under this package. Unfortunately, the House never took it up, the Governor [Josh Shapiro] never championed it, never even said whether he would support it or if he was against it. The Governor and the Administration, they’ve been pursuing other avenues, such as increasing state funding for senior programming,” Stelle said.

“We just think the only way that you’re really going to cover the challenges in Pennsylvania, the out-migration, the inflation, is to grow the economy. And these sorts of broad-based tax reductions are much better at growing the economy than picking the economic winners and losers with various programs.”

When asked whether the Shapiro Administration would revisit Senate Bill 269, Stelle confirmed the bill is “still alive” and could be taken up for further action in the fall, once the legislature returns from its summer recess. 

“It’s not clear how likely that is. We’re not really sure what the legislature is going to prioritize when they come back in late September,” Stelle said.

Shapiro did not respond to multiple requests for comment from Altoona Times. 

With respect to proposals out there to expand healthcare services for seniors, Stelle said such measures would include Senate Bill 25, which if passed, would permit nurse practitioners to provide full-service care, allowing each one to see an additional 100 patients annually.

Pennsylvania is ranked fifth among the fifty states for the number of people age 65 and over, according to a 2017 Penn State study, and that older population grew at a rate 20 times faster than the state’s general population from 2010 to 2017, increasing by 16.3%.

The poll was conducted by NORC at the University of Chicago for the University of Michigan Institute for Healthcare Policy and Innovation (IHPI). The survey was administered online and via phone among 3,370 adults age 50 to 101 in February and March 2024.