PA State Budget: Final Budget HB 1416
October 2009 House Republican Caucus
State Budget Summary and Analysis
Overview of Spending • Total Spending: $27.799 Billion o State Dollars: $25.179 Billion o ARRA Stimulus Dollars (Federal Offset): $2.62 Billion • Spending Comparison o FY 2008‐09: $28.371 Billion (Includes Federal Offset ‐ ARRA) o HB 1416: $27.799 Billion o House GOP Budget: $27.467 Billion o Rendell Budget Proposal: $28.923 Billion Revenue • After completing the FY 2008‐09 Fiscal Year with a $3.25 Billion revenue shortfall, the following revenues were needed to balance the state’s $27.779 Billion spending plan. New and Increased Taxes • Capital Stock and Franchise Tax rate changed to 2008‐09 level of 2.89 mills (current rate is 1.89 mills). This would be a $374 Million tax on businesses that pay the CSFT. • A gross receipts tax would be applied to Medicaid MCOs in an effort to generate $528.5 Million in total funds in FY 2009‐10. This tax would be deposited into a restricted account to augment DPW’s Medical Assistance Capitation appropriation. This replaces the expired Medical Assistance MCO assessment and is preferred by those assessed versus the governor’s proposed 2 Percent broad based tax. • Tax increase on cigarettes of 25 cents per pack (bringing total tax to $1.60 per pack). This would generate about $97 Million. • Creates a new tax on “Little Cigars” at $1.60 per pack to generate $16 Million in revenue. Additional Revenue Adjustments • Transfers the 25 cent portion of the cigarette tax currently dedicated to the HCPRA to the General Fund for annual revenue of $171 Million. • Transfers $755 Million from the Rainy Day Fund. Totally drains the fund. • Transfers $708 Million from the Health Care Provider Retention Account. Totally drains the fund. • Transfers $150 Million from the Tobacco Endowment Account and $250 Million in 2010‐11. • Transfers $100 Million from the MCare Fund.
Additional Revenue Adjustments (continued) • Changes tax credit programs to generate $38 Million in revenue this year / $75 Million next year. o Film Tax (Currently at $75 Million): $42 Million in 2009‐10 / $60 Million 2010‐11. o EITC (Currently at $75 Million): $60 Million in 2009‐10 / $50 Million in 2010‐11. o Research and Development: (Currently at $40 Million): $20 Million in 2009‐10 / $18 Million in 2010‐11. o Other tax credits reduced 50 Percent in 2009‐10 and 55 Percent in 2011‐12. • Accelerate the due date of PIT taxes paid to the Commonwealth to a semi‐weekly rate to generate $159 Million. Department Spending Overview
LOCAL EDUCATION
• Basic Education: This budget would provide a total of $5.53 Billion to the state’s 500 school districts. This represents a $300 Million increase over last year. o $654 Million of these funds will come from federal ARRA money. o Schools are also slated to receive about $715 Million in additional Title I, Title IID and IDEA funds from the federal government. Special Education: State funds would remain at the FY 2008‐09 levels of $1.03 Billion. Portions of the $715 Million in stimulus funds would be directed to special education through the federal IDEA initiative. Accountability Block Grants: Funding for these grants would be set at $271.4 Million, which gives schools flexibility to fund areas of need. This would level fund the program at the 2008‐09 appropriations mark. Science In Motion: The budget provides $1.9 Million for this nationally recognized and award‐winning program, which provides science education support to rural communities through partnerships with colleges and universities. Services to Non‐Public Schools: More than $1.8 Million in new funding will be afforded to Services for Non‐Public Schools, for a total of $89.09 Million. o An additional 27.2 Million will be provided for textbooks and other materials – a $700,000 increase. Pre‐K Counts: Funding for this early‐childhood initiative supporting eligible families – family of four making $66,000 or less – is set at $86.4 Million. This is the same funding level as last fiscal year. Head Start Assistance: This program, which provides early‐childhood education support to low‐income families (family of four making $22,000 or less) was provided $39.5 Million. This is equal to last year’s total. Public Libraries: Pennsylvania public libraries would receive $60 Million under this proposal, representing a $15 Million decrease from FY 2008‐09. Science: It’s Elementary: This program, which supports science education initiatives in elementary schools, will receive $13.6 Million. This is equal to last year’s funding level.
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HIGHER EDUCATION
• Community Colleges: State dollars for these schools would remain at the FY 2008‐09 total of $235.7 Million. This total includes $22 Million in ARRA funds. State‐Related Universities: The state’s four state‐related universities (PSU, PITT, Temple and Lincoln) will receive the following: o PSU: $333.9 Million (Includes $15.8 Million in ARRA) o PITT: $168 Million (Includes $7.5 Million in ARRA) o Temple: $172.7 Million (Includes $7.8 Million in ARRA) o Lincoln: $13.8 Million (Includes $159,000 in ARRA) Non‐State Related Universities and Colleges: The budget will provide $38.5 Million for these education and medical‐affiliated institutions. o More than $34.4 Million of this total will go to the Penn Veterinary School, as it is the only one of its kind in the state. State System of Higher Education: The state’s 14 universities would be provided a total of $503.4 Million. This includes $38.2 Million in ARRA funds. SSHE funding would be about $21 Million less than last year. PHEAA: This budget plan would provide $455.2 Million for the Pennsylvania Higher Education Assistance Agency, of which, $403.6 Million would go to the agency’s Education Assistance Grants program. Both represent a slight decrease from the prior year.
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PUBLIC WELFARE
• Medical Assistance: About $5 Billion is allocated to the Medical Assistance program’s “Big Four” appropriations through DPW to address the needs of low‐income families, children, seniors and the disabled. Of this total, about $1.4 Billion is ARRA money and $3.6 Billion state money. Hospitals: Funding for hospitals in this proposal would break down as follows: o Burn Centers: $5.1 Million o MA Critical Access Hospitals: $4.9 Million o Trauma Centers: $11.5 Million o Obstetric and Neonatal Services: $5 Million o Community Access Fund: $28.2 Million County Child Welfare: More than $1.04 Billion would be provided to support abused, at‐risk and neglected children. This represents about a $7.9 Million increase over last year. Human Services Development Fund: This appropriation, which helps counties throughout the state fill gaps in their human services delivery system, would be funded at $29.3 Million. This is a $4.5 Million reduction from last year. Pharmaceutical Carve‐Out: This budget rejects the governor’s Carve Out proposal for the fourth budget.
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PUBLIC WELFARE (continued)
• Mental Retardation Services: Appropriations supporting individuals in need of care for mental retardation services would be afforded (includes ARRA) a total of $1.34 Billion. o Intermediate Care Facilities: $101.9 Million / Plus $39.4 Million in ARRA Funds o Community Mental Retardation (Base Services): $156.7 Million / Plus $2.2 Million in ARRA Funds o Community Mental Retardation (Waiver Services): $622.8 Million / Plus $179.8 Million in ARRA Funds o State Centers for the Mentally Retarded: $76.2 Million / Plus $31.8 Million in ARRA Funds o Early Intervention: $122.1 Million. / Plus $5.8 Million in ARRA Funds Autism Intervention and Services: Nearly $22.8 Million would be provided to support individuals with Autism. This total includes $3.4 Million in ARRA funds and $19.4 Million in state dollars. • Services to Persons w/ Disabilities: This budget would provide $122.1 Million to support disabled Pennsylvanians who will be transferred to Community Based Programs. This total includes nearly $29 Million in ARRA funds and $93.1 Million in state dollars. Altogether, it represents a $36 Million increase over last year. Attendant Care: The budget calls for $126.1 Million in funding for this program, which also provides services to persons with disabilities. This total includes $16.7 Million in ARRA funds and $109.4 Million in state funds. Office of Aging and Long Term Living: This budget does not merge the Department of Aging with DPW’s Office of Long Term Living as originally proposed by the governor.
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PUBLIC SAFETY
• Corrections: The Department of Corrections would receive $1.61 Billion in funding in this budget. This represents a $6.8 Million increase over 2008‐09. o Another $172.9 Million would be provided to the department through ARRA funding. Attorney General: Total funding for the AG’s office would be marked at $86.5 Million in this budget. This represents an $8 Million reduction from 2008‐09. o Of the reduced funding to the Attorney General, nearly $5 Million was in the General Government Operations appropriation. o Notable Funding: Anti‐Drug Crime Fighting Programs: $38.4 Million. Child Predator Interception Unit: $1.4 Million. State Police: The General Fund would provide the State Police with $182.7 Million under this proposal. This represents a slight increase over the prior year. Probation and Parole: A total of $117.7 Million would be allotted for this department. This represents a $6 Million increase over the prior year.
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HEALTH PROGRAMS
• Department of Health: The department would receive $240 Million in this budget. This represents a $32.9 Million reduction in funding from the previous year. Health Program Funding: Epilepsy Support Services: $396,000 Bio‐Technology Research: $2.6 Million Tourette Syndrome: $50,000 Newborn Screening: $4.4 Million Regional Cancer Institutes: $1.2 Million Cancer Care Funding: Nearly $3.2 Million is provided in the Department of Health for Cancer control and screening programs. Assistance to Drug and Alcohol Programs: This budget provides $41.75 Million to support individuals fighting drug and alcohol addiction.
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AGRICULTURE
• Department of Agriculture: The department would receive $67.8 Million in this budget, which is $8.3 Million less than last year. o Program funding under the department includes: Crop Insurance: $600,000 Agriculture Research: $1 Million Payments to PA Fairs: $2 Million Hardwoods Research and Promotion: $240,000 State Food Purchase: $18 Million Animal Health Commission: $5.2 Million o NOTE: Additional funds for Penn State’s Agriculture Extension and Agriculture Research programs will also be available through the University’s appropriation.
PARKS AND FORESTS
• Department of Conservation and Natural Resources: More than $92.3 Million will be provided to DCNR – a decrease in funding of approximately $21 Million compared to last year. o Notable Funding: State Park Operations: $50.4 Million (‐$9.2 Million from 08‐09) State Forests Operations: $17.1 Million ( $239,000 increase over 08‐09)
ENVIRONMENT
• Department of Environmental Protection: This budget provides $159.06 Million for DEP’s environmental operations and program expenses. This represents a $58 Million reduction in funding from 2008‐09. o Several grant programs were totally eliminated, while others were reduced: Safe Water Grants: No Funding Black Fly Control: $5.1 Million Flood Control Projects: $4.2 Million Consumer Energy Program: No Funding
ECONOMIC DEVELOPMENT / LABOR AND INDUSTRY
• Department of Community and Economic Development: The department’s total funding under this budget would be $264.8 Million, which is about $303 Million less than FY 2008‐09. Most grant programs and non‐essential funding were reduced or eliminated. o Programs and Grant Funding in DCED include: Local Development Districts: $3.3 Million Small Business Development Centers: $4 Million Industrial Development Assistance: $1.6 Million New Communities: $11.2 Million Opportunity Grants: $18.3 Million Department of Labor and Industry: Total funding for the department would be about $92.1 Million in this budget. This represents a $28.6 Million reduction from last year. o Notable program funding in L&I includes: New Choices / New Options: $1.5 Million Centers for Independent Living: $2.2 Million
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MILITARY AND VETERANS AFFAIRS
• MVA: Total funding for the Department of Military and Veterans Affairs is $111.3 Million. This represents a $15.7 Million reduction in funding from last year. o Notable appropriations include: Veterans Homes: $82 Million Veterans Outreach Services: $1.7 Million Civil Air Patrol: $150,000 Veterans Assistance: $428,000 Disabled Veterans Transportation: $350,000
STATE GOVERNMENT
• General Assembly: Both the House and Senate reduced total appropriations. o House: $184.6 Million ($7.3 Million Reduction) o Senate: $92.1 Million ($9.7 Million Reduction) Governor’s Office: The Office of the Governor would also receive a cut in funding, bringing the total to $6.9 Million or $393,000 less than FY 2008‐09.
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