House Democratic Policy Committee Holds Hearings on Budget Impact

The House Democratic Policy Committee has been holding a series of hearings on the impact of the new state budget.  At a hearing Wednesday, Brinda Carroll Penyak, deputy executive director of the County Commissioners Association of Pennsylvania, told the Committee that cuts in funding for mandated programs will mean some tough choices.

Penyak says counties have less desire to raise property taxes than anyone, it’s not something they do freely, and they’re very concerned with how some of the impacts will have to be dealt with locally. She says when mandate lines get cut; anything that might be considered preventative or optional can go by the wayside pretty quickly. She says child welfare funding was reduced by 45 million dollars.

Penyak says cuts in funding for mandated programs have a ripple effect. She says these are not services you can decide not to offer, you can’t put abused kids on a waiting list. She says the ability to provide the service has to come first.

Penyak says the budget also cut funding for the Human Services Development Fund, and it’s now about 70% below what it was a few years ago. She says in a lot of cases, that money is used to pay for things that actually prevent more costly situations from occurring.

Penyak says counties have been getting less and less money for 9 years now. A lot of them have made significant changes and have tightened their belts as much as they can.

Governor Tom Corbett Defends Education Budget

The new state budget has been in place for about two weeks now, but its impact on public schools is still being sorted out.  “We don’t know yet how many teachers wound up being furloughed, and how many program cuts, so we’re trying to gather that information,” says Tom Gentzel, executive director of the Pennsylvania School Boards Association (PSBA). 

Governor Tom Corbett points out that state education funding has actually increased.  “When it comes to the basic education formula, we actually increased it over the 2008/2009 level,” Corbett said on Radio PA’s monthly “Ask the Governor” program.  He places blame on the prior administration for cutting school funding from the state, only to back-fill with federal stimulus money.  “That money is gone,” Corbett concluded. 

By balancing their budgets with federal stimulus money, Corbett says many school districts set themselves up to fall off this funding cliff.  At least one school district got it right though, according to Corbett.  He singled out Northern Lehigh School District on the program.  “They did not take the federal money and put it into their basic funding formula.  They haven’t laid anybody off, they haven’t cut any classes, they were – in my opinion – responsible in that.” 

However, the PSBA’s Tom Gentzel stresses it was the legislature who put the federal money into schools’ regular appropriation.  “So this wasn’t just a decision on the part of school districts… it was a part of the state funding for education,” Gentzel explains.  He adds that school districts are feeling the pain beyond the basic education funding line item. 

When including the federal stimulus money, basic education funding was trimmed by about $400-million dollars (though Governor Corbett was correct when he said the state’s share increased).  The Accountability Block Grants, which fund full-day kindergarten programs, were cut by about $150-million dollars.  Completely eliminated was the reimbursement of charter schools.  That line item received more than $220-million dollars last year.

Capitol Rotunda - Facing House Chamber

State Budget’s Education Cuts Scrutinized

It’s a budget that represents shared sacrifices, and president of Pennsylvania Partnerships for Children Joan Benso says kids are sharing a big chunk of the sacrifice.  Benso’s budget reaction is somewhat mixed.  For instance she says the $100-million dollar restoration for Accountability Block Grants will be helpful.  “But for example… in Harrisburg, their school board voted to go back to part-day K, the restoration simply isn’t enough,” Benso says.  The Accountability Block Grants are used in large part to fund full-day kindergarten programs across the state.  Governor Tom Corbett’s original budget proposal would have eliminated them.  Lawmakers worked to restore $100-million of last year’s $259-million dollar line item. 

The Pennsylvania State Education Association (PSEA) – the state’s largest teachers union – is lamenting what they calculate to be $860-million dollars in cuts to public education.  “We’re very concerned about the consequences this is going to have on student performance,” says PSEA spokesman David Broderic.  “Pennsylvania students in public schools have made dramatic gains in student performance in the past six years, and part of that has to do with resources being directed at programs that work.” 

State Education Secretary Ron Tomalis

State Education Secretary Ron Tomalis

The “Basic Education Funding” line item will receive $5.35– billion dollars this year.  Last year’s appropriation included $4.73-billion state dollars, in addition to roughly a billion federal stimulus dollars, which are no longer available.  “States were warned not to use that money in a way that would create long-term obligations, and unfortunately that’s exactly what Pennsylvania did,” says state Education Secretary Ron Tomalis.  As the new budget forces the state to live within its means, Tomalis says the education system will have to do the same.  Overall, public education and K – 12 educational programs will receive $10.1-billion dollars in FY2012. 

State Senator Jake Corman

State Senator Jake Corman (R-Centre)

Higher education was projected to receive a 50% state funding cut, according to Governor Tom Corbett’s March 8th budget proposal.  Those figures have since been mitigated to 18% cuts to the 14-universities in the State System of Higher Education, 19% cuts to the state related universities (PSU, Pitt, Temple and Lincoln).  The State System’s board has already approved a 7.5% tuition hike for the new school year.  Even more recently, Temple became the first state related university to approve a new budget.  It calls for a 10% tuition increase.  Penn State’s trustees will set new tuition rates next Friday (July 15th).  The higher education funding issue isn’t likely to go away anytime soon.  “I think that we should take the summer and the fall to get a better understanding of some of these issues, and then be prepared for next year when the budget comes around again,” says State Senator Jake Corman, who chairs the Appropriations Committee.  The Centre County Republican also represents State College, which is – of course – home to Penn State University.


Arts Funding Dodges Significant Budget Cuts

Funded at $8.1-million dollars in the new state budget, the “Grants to the Arts” line item represents a tiny fraction of the $27.15-billion dollar spending plan.  But, supporters say that small investment brings back a huge return.  “If you include all arts related spending, about 62,000 full-time equivalent jobs are created annually,” says Jenny Hershour, managing director of Citizens for the Arts in Pennsylvania.  “It also generates economic activity around $2-billion dollars a year… so it’s an economic generator,” Hershour tells us.

While funding is still down slightly from last year’s $8.4-million dollar appropriation, it’s a vast improvement from the more than 70% cuts that House Republicans called for in their first budget counterproposal.  Hershour credits grassroots advocacy with preserving the funding:  “I think the General Assembly understands the importance of these very small grants that go to arts organizations, and the very large impact that it has on their constituents.”

First Lady Susan Corbett

First Lady Susan Corbett with Governor Tom Corbett

Pennsylvania’s First Lady Susan Corbett chairs the Pennsylvania Council on the Arts.  She has served on the council since 1999.  When asked about arts funding on Radio PA’s monthly “Ask the Governor” program (prior to the final budget) Governor Tom Corbett quickly sided with his wife over the House Republican budget plan.  “There is a significant return on investment… in tourism dollars, in growing art in Pennsylvania; whether it be in the community, in the schools or wherever,” Corbett said. 

The arts grants are used for a variety of programs in all 67-counties.

Corbett Signs Budget Ahead of Deadline

PA Budget Signing Beats Midnight Deadline

The $27.15-billion dollar, no-tax increase budget trims state spending by more than a billion dollars.  It passed the legislature with zero Democratic support Wednesday night, but Governor Tom Corbett waited until all of the supporting bills were in place before finally putting pen to paper late Thursday night. 

The administration reports that 66-line items were eliminated, 226-line items were reduced, and 52-line items were consolidated.  Basic education funding will receive $5.35-billion dollars in the new fiscal year.  That’s down from a total of $5.77-billion dollars last year (a number which included federal stimulus dollars).  The State System of Higher Education is already responding to 18% funding cuts.  Its board of governors approved a 7.5% tuition hike on Thursday.  Similarly, the state related universities (PSU, Pitt, Temple and Lincoln) face 19% reductions in state support.    

Governor Corbett calls the lean spending plan an important first step in putting PA’s fiscal house back in order.  “It spends no more than we have and it doesn’t pretend that we have more that we haven’t budgeted,” Corbett said referring to Democrats’ calls to use last year’s unexpected revenues to mitigate cuts to education and welfare programs. 

At Thursday night’s bill signing, Governor Corbett said the budget was crafted to grow PA’s economy: “Make no mistake here. This is a budget for Pennsylvania families, for Pennsylvania working families.  It is a budget that imposes no new taxes on them.”

Governor Corbett also hailed legislative passage of a new bill to limit Act 1 exceptions – thus requiring a voter referendum if a PA school district seeks to raise property taxes above the rate of inflation.  While it was technically an unrelated bill, it represents a Corbett priority and the final piece of the budget package.  “I believe we need to give the citizens of Pennsylvania, in the school districts, the ability to voice their opinion in more than just the election of school board directors,” Corbett tells reporters.     

However, the Pennsylvania School Boards Association is concerned that this will result in additional reductions in educational programming.  They know that voter referenda on property taxes are extremely difficult to approve.  “The problem is, less than 25% of the population has children in schools, so there’s 75% of the population that the districts need to reach that they don’t necessarily reach on a routine basis,” says PSBA director of research Dave Davare.  “Districts are not willy-nilly raising taxes,” Davare tells us. 

With this year’s budget work behind them, the State House and Senate have each recessed until September.  This marked the first time in nine years that PA’s state budget was signed by the constitutional deadline.

Operating Budget Awaits Governor Tom Corbett’s Signature

A $27.15- billion dollar state spending plan has now passed both chambers of the legislature, with zero Democratic support.  Wednesday night’s House vote was 109 – 92.  Two Republicans joined all House Democrats in opposition to the bill

House Republican Appropriations chair Bill Adolph (R-Delaware) says it represents about a 4% reduction in general spending.  “This is only the third time in nearly 40-years that Pennsylvania will be spending less than the prior year budget,” Adolph said during House floor debates.  He contends the budget is built upon realistic and sustainable revenues.  “This budget will not create a deficit by spending beyond our means.” 

The Republican-backed spending plan would tap into some of the higher-than-anticipated state revenues, which have accumulated this year, but Adolph says they do not rely on that money to sustain the budget.  Most state officials expect the final surplus number to be in the range of $700-million dollars.  While many Democrats say more of that money should be spent to mitigate painful spending cuts, Republicans are quick to point to a long list of liabilities, including: growing pension obligations, state debt payments, a potential Mcare settlement, an unresolved transportation funding gap and more.

As Republicans tout the fiscal responsibility of the spending plan, Democrats – like Appropriations chair Joe Markosek (D-Allegheny) – say they relied on gimmicks to keep the spend number artificially low.  “This is a budget that is full of hide and seek and sleight of hand,” Markosek said.  “This is not open government.”   

Democrats complained even more loudly about more than a billion dollars in cuts to basic and higher education.  The 14-universities in the State System of Higher Education will see an 18% funding cut, and we may soon learn whether it will significantly affect tuition rates.  The ‘basic education funding’ line item, in the budget, stands at $5.35-billion dollars.  That’s down from $5.77-billion dollars last year.  But that number included federal stimulus money, and Republicans say this year’s state investment in basic education is the largest ever.

In all, Pennsylvania is losing about $2.7-billion dollars in stimulus money, which was used to balance last year’s budget.  Senate Republican leaders say the loss of federal stimulus dollars means that difficult but necessary budget cuts needed to be made.   

The legislative work isn’t over yet, as there are still auxiliary budget bills that need to be enacted.  But, if Governor Tom Corbett signs the budget today, it will break a streak of eight consecutive late budgets in Pennsylvania.

State Capitol

Senate Passes Budget Bill as Deadline Looms

Sen. Dominic Pileggi

Sen. Dominic Pileggi (R-Delaware)

The new fiscal year begins on Friday, but Pennsylvania may still have its first on-time budget in eight years.  The State Senate voted along party lines (30 to 20) to pass a GOP-backed $27.15-billion dollar spending plan Tuesday evening.   “This year marks a return to a state budget paid for with state revenues,” says Senate Republican Leader Dominic Pileggi (R-Delaware), referring to the $7-billion dollars in federal stimulus money Pennsylvania received over the past three years.  “It is difficult but necessary to reset state spending to reflect that new reality.” 

While the bottom-line is more than a billion dollars below the current General Fund budget, Senator Pileggi points out that the bill increases basic education funding by $268-million and higher education funding by $368-million, compared to the Governor’s March 8th budget proposal.

Senate Democrats still say the budget pain doesn’t have to be so severe. “We’re sitting on an extra, what will probably be by June 30th, an extra $700-million dollars in budget surplus,” says Democratic Appropriations Chair Vincent Hughes (D-Philadelphia). 

But that’s a “so-called” surplus, according to Governor Tom Corbett.  “Yes more revenue has come in, but we still have a deficit… We have spending that has to be done in the future, we don’t think that next year is going to be much rosier – if at all – than this year,” Corbett told reporters on Tuesday. 

While Corbett says spending matches revenues in the current budget bill, he knows that it’s not a done deal yet.  “Until there is a budget, until I have an opportunity to sign one, there is no budget,” he says.  The budget bill now awaits House action.

AARP Lobby Day

A ‘Sea of Red’ at the State Capitol

Dick Chevrefils

Dick Chevrefils talks with Radio PA

Between 800 and 1,000 Pennsylvania members of AARP gathered on the state capitol lawn, Tuesday, for their annual lobby day.  All donned red AARP t-shirts.  State director Dick Chevrefils says they came to share their voices with the legislature about the issues that are important to the AARP.  “There’s a family caregiver piece of legislation that’s in both the House and Senate that we’re hoping is going to pass because it’s going to make a big impact on people that have the responsibility of caring for a loved one.”

The bills (HB 210 and SB 639) would allow neighbors and friends to enroll in the Family Caregiver Support Program, which is currently only open to relatives.  It would also increase the maximum monthly reimbursement from $200 to $600.  “It’s not going to cost the state any additional money… the funds are already there,” Chevrefils tells us.  The program is funded through state lottery revenues and federal sources.  Both bills have already passed the committee level and await additional action in their respective chambers. 

AARP members are also paying close attention to the state budget debate.  “We’re waiting to get a full picture of the budget, but at this point it’s basically watching and making sure we’re protecting the people of Pennsylvania,” Chevrefils says.  Their goal is to ensure there’s no loss to the funding for services that help people maintain their independence and stay in their homes: “When you see that sea of red, it’s the collective power of people coming together.  These people care about everybody – not only older people – but children, families, people with disabilities.  It’s all about people.”

Harrisburg's skyline

Pennsylvania House Passes $27.3 Billion Budget

    Over Democrat objections, the Pennsylvania House of Representatives has given it’s approval to a $27.3 billion, no-tax increase state budget that restores some proposed cuts in education. The House vote was 109-92 and the action leaves 37 days for the House and Senate to work out any differences before sending a final budget to Governor Tom Corbett’s desk.

    House Republicans say they have restored $200 million in basic education cuts and $300 million for higher education, compared to the governor’s original spending proposal unveiled in March. The GOP found the additional dollars for education by counting on savings in the Department of Public Welfare, and not by tapping into a projected half-billion dollar budgetary surplus this year. Governor Tom Corbett has made it clear that he wants that money to go into reserve funds or be used to pay down debt.

    Democrats argue that the surplus money should be used to offset some of the remaining education cuts, saying the House budget still cuts a billion dollars from existing education spending. They characterize the budget as “anti-middle class,” primarily because they say state cuts in funding for local services will result in increased county and local levies, including higher property taxes.

    The budget bill now goes to the state Senate and negotiations between the two chambers will determine the final spending plan, which is due by June 30th. It’s been nearly a decade since a governor has signed a budget before that fiscal year deadline.

Final House Budget Vote Possible Today

    The Pennsylvania House of Representatives is poised to give its final approval to a $27.3 billion budget plan. The House voted 110-89 to advance the bill on Monday, setting up the final vote which could come as early as today. The spending plan stays true to Governor Tom Corbett’s overall spend figure, while supporters say it proritzes education funding over welfare spending. That means that while some of the Governor’s proposed education cuts are still included, some of that funding has been restored in the House version.

    House Speaker Sam Smith (R-Jefferson) left the door open for more spending on Monday, but only if the Governor’s office changes its revenue projections for the new fiscal year which begins on July 1st. Meanwhile, Smith agrees with the governor’s stance on this year’s surplus, currently a half-billion dollars. That money is destined for reserve accounts or for debt payments.

    Speaking to the PA Press Club on Monday, Speaker Smith also laid the blame for this year’s budget deficit squarely on the shoulders of former Governor Ed Rendell. Smith says Rendell’s legacy is the $4 billion budget gap that lawmakers are now trying to fill.