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Harrisburg, PA – Building on his commitment to create Jobs That Pay as Pennsylvania’s economy continues to expand, Governor Tom Wolf today signed an executive order that increases pay for employees under the governor’s jurisdiction to no less than $12 an hour on July 1, 2018 and raises the wage by 50 cents a year until reaching at least $15 per hour in 2024.

“Pennsylvania must be a place where hard work is rewarded, but today too many people cannot afford the basics,” said Governor Wolf. “This executive order increases the wage floor for state workers and state contractors, but the General Assembly has not given all minimum wage workers a raise in nearly a decade. More than half of the states have a higher minimum wage, including all of our surrounding states, leaving many Pennsylvanians behind. Raising the wage puts more money in their pockets which generates business for our economy and makes the commonwealth stronger. Hardworking men and women should not have to wait any longer. It’s time for the General Assembly to join me and raise the wage.”

Workers in Pennsylvania earning the minimum wage of $7.25 an hour have only 26 percent of the purchasing power they did in 1979. A family of two working full-time and earning minimum wage falls below the poverty line. Increasing the minimum wage is a win-win for workers and the economy. Boosting wages provides workers with more income to purchase items they most need, which generates business for the local economy and reduces costs for state services.

The governor’s executive order also covers employees of state contractors, those that lease property to the commonwealth, and employees that perform direct services to the commonwealth or spend at least 20 percent of their working time on ancillary services related to the contract or lease. After reaching $15 an hour in 2024, the minimum wage rate would increase by an annual cost-of-living adjustment using the percentage change in the consumer price index for all urban consumers for Pennsylvania, New Jersey, Delaware, and Maryland.

The current wage floor for employees is $10.20 an hour under an executive order signed by the governor in March 2016.

Questions, contact RCPA Director of Government Affairs Jack Phillips.

Contact Tribune-Review

Editorial: Lend your feedback to the Pa. School Safety Task Force

RCPA is encouraging our members to take this opportunity to provide Governor Wolf and Auditor General Eugene DePasquale with input about what state officials and the mental health community should do to improve school safety. The task force, led by Governor Wolf and Auditor General DePasquale, is compiling a report due later this year.

The Task Force’s mission is to evaluate issues such as funding for school safety, access to physical and mental health support, effectiveness of state requirements for training and security, how well safety issues are reported, and whether precautions like anonymous tip tools are in place. The Pennsylvania School Safety Task Force was formed after the Feb. 14 shooting in Parkland, Florida.

Please use this link to submit feedback.

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Scaled-down fiscal code includes school safety funding transfer, big money for PA’s Community HealthChoices program.

By Chris Comisac
Bureau Chief
Capitolwire

HARRISBURG (June 22) – This year’s state budget fiscal code – which directs how money appropriated by state lawmakers is to be spent – is trimmer than it has been in many past years.

The actual language of this year’s code totals just 45 pages; it was amended into House Bill 1929 by the Senate early Friday afternoon, and later approved by both chambers of the General Assembly and signed by Gov. Tom Wolf.

While there are plenty of pages covering the usual spending dictation found in any budget fiscal code, there are several new items included this time around.

The Keystone Scholars Grant Program, which was also proposed as a stand-alone bill (Senate Bill 1130), would be created by language within HB1929 on pages 8 through 13.

As part of the program, the State Treasurer is authorized to deposit $100 into a PA 529 account with the stated intent to grow the deposit with interest during the youth of the child and provide the incentive for parents to open their own PA 529 account. The program will be funded through Treasury investment earnings, donations and endowments from the philanthropic community.

According to the Senate Appropriations Committee, 140,000 children are born each year in Pennsylvania. The language within HB1929 would cap the transfer from the Tuition Account Guaranteed Savings Program Fund (PA 529) to the Keystone Scholars Grant Account at $14 million in any fiscal year.

On page 13 of the bill, there are provisions to create a new definition for “lost contact,” with regard to the state’s disposition of abandoned and unclaimed property, so that shares of stock reported to the Pennsylvania Treasury are only those that have truly been abandoned and unclaimed, not merely held in a passive investment account.

The changes to the criteria, which are also contained in House Bill 2167, are anticipated to result in a 10 percent reduction of the state’s net revenue from unclaimed property, to about $68 million.

Like last year, the state is expecting money from the Volkswagen Group of America settlement, which the car company is paying after allegations arose that it was cheating on U.S. Environmental Protection Agency emissions tests.

Language on page 15 of HB1929 would ensure that when it’s received, $30,409,005 from the settlement with be deposited into the General Fund.

On page 20 of the bill, $45 million in transfers to the Business in our Sites Program account are authorized: $10 million from the First Industries Program account, $35 million from the Building Pennsylvania program.

Language from House Bill 431 is also included in the fiscal code, on page 20, creating the Private Dam Financial Assurance Program.

Under that program, a one-time $1,000 fee and an annual fee of 1 percent of the bond amount required by the Department of Environmental Protection shall be deposited into the Private Dam Financial Assurance Fund, with the fees available to be used to establish a revolving loan program to provide maintenance and repair assistance once the fund’s balance is equal to or greater than $1.5 million.

The Rainy Day Fund is supposed to get its first deposit since before the Great Recession, and the fiscal code, on page 26, increases the amount to be transferred to the fund from 25 percent to 50 percent of any surplus in the General Fund for fiscal year 2017-18, which is estimated to provide an additional $9.9 million to the fund.

Water and sewer projects are to get some extra funding – $35 million in total – as part of language found within the fiscal code on page 27.

That funding – to be made available for water and sewer projects with a cost of not less than $30,000 and not more than $500,000 – comes by way of $10 million coming from funds available to the Commonwealth Financing Authority (CFA), as well as a $25 million transfer from the First Industries Program.

Like many other fiscal codes, this one alters the distribution of Tobacco Settlement Fund payments (on pages 28 through 30):

*4.5 percent for tobacco use prevention and cessation programs ($15,539,000);

*12.6 percent for health and related research under Section 906 of the Tobacco Settlement Act ($43,509,000);

*1 percent for health and related research under Section 909 of the Tobacco Settlement Act ($3,453,000);

*8.18 percent for the Uncompensated Care Payment Program ($28,246,000);

*30 percent for the purchase of Medicaid benefits for workers with disabilities ($103,594,000); and

*43.72 percent shall remain in the fund to be separately appropriated for health-related purposes ($150,786,000).

In addition to $351,815,000 distributed for health-related programs during FY2018-19, there’s a one-time $15.4 million transfer to the Office of Attorney General Criminal Enforcement Restricted Account for criminal enforcement – this money comes from the recently announced settlement reached by the Attorney General and tobacco companies that, according to the Office of Attorney General, will deliver a one-time amount of $357 million to Pennsylvania.

The notable difference between this year’s disbursements and last year’s fiscal code tobacco funding disbursements is last year 13 percent of the funding was devoted to home- and community-based services; this year, other than $15.4 million transfer to the Attorney General, the remainder of that one-time settlement windfall (Roughly $341.6 million) will be used for the state’s Community HealthChoices program, Pennsylvania’s mandatory managed care program providing home- and community-based care for individuals who are eligible for both Medical Assistance and Medicare (dual eligibles), older adults, and individuals with physical disabilities.

The other difference is 43.72 percent of this year’s funding will go to health-related purposes that are separately appropriated; last year’s fiscal code directed 30.72 percent to that purpose.

Just as the distribution of tobacco settlement funds can be found in every fiscal code, so are distributions from the Pennsylvania Race Horse Development Fund.

On pages 32, 34 and 35 of HB1929 are provisions that transfer from the fund $19,659,000 (in 22 weekly installments) for agricultural-related programs, and another $10,066,000 for enforcement of medication rules and regulations in FY2018-19.

The fiscal code, on page 35, also transfers $2.5 million from the sale of liquor and alcohol to the Department of Drug and Alcohol Programs.

Clarifications regarding the state’s First Chance Trust Fund are spelled out on pages 35 and 36, requiring that when determining preference for student scholarships or programs that benefit children, the victimization of the student or child, the impact of crime on the student or child and the risk factors identified by the current policy statement, be the factors that are considered.

More funds distribution language is found on pages 38 and 39 of HB1929, with the provisions specifying that for the $20 fee collected for the issuance of death certificates by a local registrar, $3 shall be retained by the local registrar until the $60,000 threshold is met, after which fees will be transmitted to the Department of Health to be deposited in the General Fund. Of the remainder of that fee, $16 shall be deposited in the Vital Statistics Improvement Account and the other $1 is to be transmitted to the Department of Health for distribution to the county corner or medical examiner. With regard to the funding to be deposited into the General Fund, the Senate fiscal note offer no detail regarding the potential fiscal impact as it will be entirely dependent upon the demand for death certificates when there is a local registrar.

The code bill, on page 39, requires the amount of $7 million to be used to augment funds appropriated to the Bureau of Occupational and Industrial Safety, and the remaining funds – believed to be less than $1 million – to be transferred to the General Fund.

Funding for the Department of Labor and Industry’s Reemployment Fund is reauthorized through Sept. 30, 2022, on pages 39 and 40 of the code.

Five-percent of the unemployment compensation contributions paid by employees will be contributed to the fund, with those annual contributions expected $10 million in 2018, $10 million in 2019, $13 million 2020, $14 million in 2021, and $15 million in 2022.

In an effort to pump more money ($14 million, coming from the Property Tax Relief Fund) into the State Lottery Fund, HB1929 (on page 40) alters the definition of “income” with regard to the state’s Taxpayer Relief to exclude an amount equal to 50 percent of the average retired worker Social Security payment for a person who receives pension benefits from the Federal Civil Service Retirement System and was not required to make Social Security payments.

The bill, on page 41, also generates an additional $7.1 million for the state’s Access to Justice Account (which provides civil legal assistance to poor and disadvantaged Pennsylvanians) by imposing an additional $2 surcharge on all court filings, as authorized by last year’s fiscal code.

The funding for a new school safety program is transferred by the fiscal code (on pages 42, 42 and 75), ensuring that $60 million is deposited into The School Safety and Security Fund.

Of the $60 million, $30 million is transferred from funds restored from Gov. Tom Corbett’s FY2014-15 line item vetoes that were overturned by the courts late last year. Another $15 million is transferred from fines and fees collected by the Judiciary, with the last $15 million transferred from Personal Income Tax revenue.

The reinstatement of funding from those line item vetoes is spelled out on pages 44 and 45 of HB1929. With $30 million of the restored funds used for the school safety program, the code lapses the remaining $35.1 million.

Found on pages 42 and 43 of HB1929 is authorization for the state Transportation Secretary to waive, for good cause, the requirement for local matching funds as part of the Multimodal Transportation Fund, if the applicant for assistance is the Philadelphia Regional Port Authority (in addition to the existing allowance for municipalities. The match requirements for multimodal funding through the Commonwealth Financing Authority portion of the program are also waived for both, with all of the aforementioned provisions to expire on Dec. 31, 2019.

Pages 67 and 68 contain language providing $30 million annually for the Department of Revenue to administer its Enhanced Revenue Collection Account through FY2019-20.

The administration of the hybrid retirement plan created for the state’s two public pension plans get some funding through the fiscal code. On page 75, a total of about $10.1 million ($4.9 million for the State Employees’ Retirement System, and $5.2 million for the Public School Employees’ Retirement System).

And the dairy industry gets some additional support – $5 million – through the fiscal code, with pages 75 and 76 of HB1929 authorizing yet another transfer from the First Industries program to the Commonwealth Financing Authority for “research and development, organic transition, value-added processing and marketing grants.”

Some other odds and ends from the code:

*The Independent Fiscal Office this year, when it came time for the agency to do its initial and final revenue estimates, ran into some timing issues with regard to corporation tax collection information. Specifically, the collections in May came in later than the IFO expected, and in June, the IFO delayed their June 15 final revenue estimate until June 18 to ensure they captured the tax information. HB1929 (on pages 36 and 37) changes the IFO’s deadlines for the initial and final revenue estimates to May 20 and June 20, respectively, in hopes of addressing the issue going forward.

*Last year’s budget was delayed several months, with that delay preventing the state from re-implementing a moratorium on new applications to the state’s PlanCon program (which provides school districts with some financial help when the districts embark on construction projects). Because the moratorium was not reinstated until the FY2017-18 budget was completed, several school districts submitted PlanCon applications.

On page 43, HB1929 allows all districts that submitted PlanCon applications during the budget stalemate, and which proceed with construction before July 1, 2021, to “be awarded a one-time capital grant, if available, for the approved project in lieu of approved reimbursement payments or, if not available, shall receive payments in the form of reimbursements.”

According to Senate Appropriations Committee Majority Chairman Pat Browne, R-Lehigh, several of the school districts that submitted applications last year are suing the Department of Education for the money that would have been available through the old PlanCon program, and it’s hoped HB1929’s language will help to resolve that issue. Browne added that efforts will intensify during the next year to create a new PlanCon program, implementing recently-released recommendations to improve the process, which many lawmakers believe should occur before the General Assembly considers restarting the reimbursement program.

*On pages 16, 17 and 18, the cap on the number of qualified tours within the Concert Tours Tax Credit is increased from 5 to 10 in FY2018-19. The language also allows the Department of Community and Economic Development to, at its discretion, approve tax credits for two additional tours in FY2018-19, which would count as an advance award against the cap available in the next succeeding fiscal year.

*And pages 37 and 38 call for the Department of Conservation and Natural Resources to, in consultation with PennDOT and utilizing existing state roads and state forest roads, develop, open and maintain an ATV trail connecting with Sproul State Forest the Whiskey Springs ATV trail (in western Clinton County) to the Blood Skillet ATV trail (in northeastern Center County) by April 1, 2020; and by April 1, 2024, implement the full Northcentral Pennsylvania ATV initiative, creating a network of ATV trails connecting Clinton County to the New York State border, by utilizing existing state roads and state forest roads.

Questions, contact RCPA Director of Government Affairs Jack Phillips.

On June 19, 2018, Governor Tom Wolf signed House Bill 1641, codifying the Employment First Policy that the governor established by executive order in March 2016 to increase competitive employment opportunities for people with disabilities.

“My executive order two years ago focused Pennsylvania on being a model state that is hospitable to workers with disabilities and I’m proud to sign this bill adding the weight of law,” said Governor Wolf. “This is a win-win for Pennsylvania. Our employers need smart and skilled workers and increasing employment opportunities ensures people with disabilities can achieve greater independence and inclusion in our communities.”

House Bill 1641, sponsored by Rep. Bryan Cutler, creates the Employment First Act requiring state, county, and other entities receiving public funding to first consider competitive integrated employment as the preferred outcome of publicly funded education, training, employment, and related services, and long-term services and support for individuals with a disability who are eligible to work under state law.

The statute also creates the Governor’s Cabinet for People with Disabilities and the Employment First Oversight Commission. The Governor’s Cabinet for People with Disabilities will review existing regulations and policies to recommend changes to laws, regulations, policies, and procedures that ensure implementation of Employment First. The Employment First Oversight Commission will establish measurable goals and objectives to guide agencies and report annual progress.

Following the governor’s Executive Order 2016-03, entitled Establishing ‘Employment First’ Policy and Increasing Competitive-Integrated Employment for Pennsylvanians with a Disability, the Departments of Labor and Industry, Human Services, and Education have been working to obtain stakeholder and business input to meet the administration’s goals. The agencies, which helped to develop HB 1641, released recommendations in September 2016.

The recommendations include:

  • Review, identify, and change policy to align with Executive Order 2016-03.
  • Raise the expectations of employment goals for children with a disability at an early age. Work with parents and publicly funded programs to shift expectations towards this goal.
  • Prepare young people with a disability to become working adults with a disability.
  • Transition students from secondary education to adult life. Assist adults with a disability in getting and keeping a job.
  • Improve access to reliable transportation to get to and from work, on time, every time.
  • Lead by example – improve state contracts and reduce barriers to commonwealth employment.
  • Expand private-public partnerships.
  • Increase public awareness.
  • Collect and coordinate data.
  • Implement, monitor, and provide accountability.

In support of the Employment First initiative, 20 Pennsylvania college students with disabilities are participating in a 12-week paid internship with the Wolf Administration this summer. The interns are working in positions at state agencies related to their academic backgrounds and gaining experience in their field of study and building connections with potential employers.

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Despite the positive attitude permeating much of the Capitol about the state budget, there are plenty of one-time sources of revenue being used to balance the budget, with hundreds of millions in General Appropriations spending reduced using those dollars making the budget’s total spend figure appear lower.

By Chris Comisac
Bureau Chief
Capitolwire

HARRISBURG (June 19) – What a difference an election year and an improving economy can make in Pennsylvania’s annual budget process.

For the past three years, the state House of Representatives and Senate, Legislative Republicans and Democrats, and Gov. Tom Wolf, have struggled mightily to pull together a balanced state spending plan.

Some years – like the 2015-16 budget’s nine-month impasse – have been more difficult than others … but not this year.

Projecting tax revenue growth for the coming year that’s at least 4 percent greater than the current year, legislative leaders – all of them – and Wolf have agreed to a state budget that will spend approximately $32.7 billion during Fiscal Year 2018-19.

According to House Appropriations Committee Majority Chairman Stan Saylor, R-York, that’s roughly $560 million more than the current year’s final spend total, with that 1.7-percent rate of growth falling within the rate of inflation, which, Saylor said, is 2.13 percent. However, hundreds of millions of dollars of spending normally found in the General Appropriations (GA) bill (most of it in the Department of Human Services’ budget lines) is being paid down by one-time dollars (some of it off-budget), making the total spend figure for the budget appear to be far lower.

Saylor’s committee, without any debate – but a few comments by the committee’s two chairmen – voted unanimously for the GA bill, House Bill 2121 Tuesday. The bill is expected to get a final floor vote in that chamber on Wednesday.

In addition to the GA bill on Tuesday, the House Appropriations Committee reported out all of the preferred and non-preferred appropriations bills that accompany the state budget. Those bills could also get final votes by the House on Wednesday.

WHAT’S IN THE BILL?

According to legislative leaders, the spending plan has a little bit of everything, including additional money for both basic and higher education, new funding for school safety, additional dollars to help those with intellectual disabilities, funds to continue addressing the state’s opioid problem and even a bit left over to start rebuilding the state’s Rainy Day Fund.

With regard to education spending, Saylor told the Appropriations Committee the budget contains an additional $100 million for basic education, $20 million more for pre-K Counts, $5 million more for Head Start, $15 million more for special education, $25 million more for the Educational Improvement Tax Credit Program (EITC) and a $30 million increase for the career and technical education appropriation in the Department of Education.

Another $70 million has been earmarked for school safety ($10 million of which will be allocated to an existing safe schools initiative), a declared priority for lawmakers since mass school shootings earlier this year in Florida and Texas.

Sixty million of those dollars will come from the money that has become available from the reversal of former Gov. Tom Corbett’s FY2014-15 veto of legislative spending. The House and Senate will each contribute $15 million, with another $15 million coming from the Wolf administration and $15 million from the state’s Judiciary.

The details of how this money will be spent remain to be spelled out in an accompanying school code bill, Said House Majority Leader Dave Reed, R-Indiana.

Reed views the setup as being similar to a new type of accountability block grant program under the education department. Schools would apply for state aid from a menu of specified options.

“For some schools it may be metal detectors, for some schools it may be resource officers, you know, it may be hardening the entrance way, that sort of thing, but we want to give schools some flexibility,” he said.

Asked if this would be a one-time revenue source rather than recurring revenue, Reed said the fund will be established with money from the legislative, executive and judicial branches and it will be up to future legislatures to provide more money.

He anticipates that every school district that applies for safe school funding would receive some money from the new pot.

Higher education will also see a funding increase, as the State System of Higher Education gets a 3.3-percent hike, while three-percent increases are coming for Pennsylvania’s state-related universities (Penn State University, the University of Pittsburgh, Temple University, Lincoln University, the University of Pennsylvania’s School of Veterinary Medicine), the state’s community colleges and Thaddeus Stevens College of Technology.

Additionally, 965 more individuals with intellectual disabilities will come off of the state’s waiting lists for services, and 5,230 more senior citizens and those with physical disabilities will be able to get home- and community-based services. Another 1,600 children will also be able to get child care services thanks to additional funding.

With regard to opioids, 800 more families affected by opioids will be able to access evidence-based home visit services.

And 50 percent of the budget’s remaining surplus – which is projected to be $149 million, so half of that is $74.5 million – will go into the Rainy Day Fund, the first time money has been put into the fund since FY2006-07 budget (prior to the Great Recession). The contribution had been 25 percent of the available surplus, but budget negotiators agreed to increase the contribution to 50 percent.

REACTION TO THE BUDGET BILL

“This is a fiscally responsible budget that provides for the needs of the citizens of Pennsylvania without increasing taxes,” said Saylor.

House Appropriations Committee Minority Chairman Joe Markosek, D-Allegheny, echoed Saylor, commending the additional funding for many important items in this, his last budget, as he’s leaving the House at the end of his current term.

“If you want to find good things in it, you can; if you want to find things that aren’t so good, you can do that to,” said Markosek of the FY2018-19 budget. “This one – there are a lot of good things in it.”

Reed said it’s an accomplishment to have agreement on a budget that spends below the rate of inflation and boosts spending for education and puts money in the Rainy Day Fund for the first time in a decade.

“I think this puts us on a solid path to financial stability in the state,” he added.

“We are in full support of the General Appropriations bill that was moved out of the House Appropriations Committee today,” said Senate Majority Leader Jake Corman, R-Centre, later on Tuesday.

Senate Republican leaders indicated their intent to get the budget bill passed by the end of the week. If the House approves the bill on Wednesday, as is expected, the Senate could refer the bill to the Senate Appropriations Committee and report it out later on Wednesday. Thursday would be a second day of consideration for the bill and the Senate could put up a final vote for the GA bill on Friday.

As for the code bills that will likely accompany the GA bill – a Fiscal Code, an Education Code and a Human Services Code – Senate leaders from both parties indicated there’s still a bit more work to be done to finalize them, which could require the General Assembly to finish up the budget process next week, although the indication was every attempt would be made to get them done this week.

“We’re excited about the budget – we think it’s fiscally responsible; it’s just a small increase in the spend; it meets a lot of priorities in the areas of education spending – which are important – school safety spending – which is important – so we’re proud to support it, and looking forward to getting it completed as well as, hopefully, some of the other budget related items – the code bills – by this Friday,” said Corman.

Following a late afternoon Senate Appropriations Committee meeting, Senate Minority Leader Jay Costa, D-Allegheny, reacted to the budget: “We’re very pleased, starting with continuing to make our annual investment in education, from pre-K all the way up to higher ed – the governor had not proposed an increase for higher ed, but a number of us fought for that, we thought it was appropriate. The early learning is not a high as we would like it to be – we’d like it to be up around $40 [million] – but $25 million again this year – a consistent increase year after year – is important. And with the career and technical education, the $30 million there, this has really been an education budget, and I think that’s important.”

Senate Appropriations Committee Minority Chairman Vince Hughes, D-Philadelphia, added, “We did some positive things here,” noting the increased funding for basic, higher and career education, “… but there’s still some glaring holes in it.”

“We’ve got to figure out, after we get through this process – I think it’s also a good sign that it’s finished early … I shouldn’t speak too fast [he then knocked on the wall’s wood panel] – there was a lot more cooperation, a lot more willingness to dialogue – and that’s all good … I think it’s the foundation going forward for creating policy and a budget program that really gets at the anxiety for lots of people in Pennsylvania,” said Hughes, who said more needs to be done about educational and wealth inequities.

And for the man who has yet to sign a state budget during his time in office, this one sounds like it will get his signature despite it being roughly $300 million short of what he proposed spending in February.

“We have worked cooperatively over the past few months to find common ground and room for compromise,” said Wolf in a statement Tuesday. “This budget makes smart investments in education, safety and human services and continues the progress we’ve made to restore fiscal stability to the commonwealth’s finances.”

BALANCING THE BUDGET – THERE’S STILL PLENTY OF ONE-TIME FUNDING

On Monday, the Independent Fiscal Office issued its final official revenue estimate for both FY2017-18 and FY2018-19. The IFO’s estimate for FY2017-18 is $135 million less than the one used by the state budget and only $32 million less than the projected revenues upon which the FY2018-19 budget is built.

While much of the budget is funded with recurring tax revenue, it would appear that nearly $1 billion, maybe more, is one-time funding that won’t be available when the FY2019-20 budget is developed.

Of that, $200 million would again come from a transfer from the Pennsylvania Professional Liability Joint Underwriting Association (JUA), which provides liability insurance to physicians.

Even though the transfer was blocked by a federal judge in May, legislative leaders said they believe they have the ability to transfer the funding, as reported by Capitolwire on Monday.

This time around, if the transfer effort should come up short – as it has during the past few years – a supplemental request or budgetary adjustments will be necessary to account for the $200 million shortfall.

There are a few other one-time funding mechanisms that have been employed to balance the state budget, according to information supplied by the House Democratic Caucus’ Appropriations Committee.

Included in those budget-balancing devices are a decision to pay for the state’s PlanCon authority rentals and sinking fund requirements by incurring more debt, freeing up roughly $130 million; a cash-flow savings of $120 million in savings from a change in the timing of monthly payments to a subset of managed care organizations (MCOs); $66 million in additional federal funding to be used in place of state funding for child care services; funds in excess of initial estimates from an agreement made between the attorney general and tobacco manufacturers to settle disputed Tobacco Master Settlement Agreement payments that were withheld from Pennsylvania starting in 2004 (initial estimates already built in the budget are roughly $275 million, with Senate Republicans suggesting the excess could be in the area of $40 million); a reduction of Pennsylvania State Police cadet classes, from four to three, during the upcoming year; and a delay by some non-law enforcement agencies in purchasing P25 radio (saving some additional funds in government operations).

Also to be reconciled next year is a $351 million one-time windfall due to Pennsylvania’s switch from a Gross Receipts Tax upon Medicaid MCOs to an assessment. The GRT was a prospective payment that had to be reconciled at a later date; that’s not the case now with the assessment, and the $351 million was revenue received by the department after the GRT ended. It’s also $351 million that will be spent in FY2018-19 by the DHS but which won’t be available going forward.

Additionally, when the FY2019-20 budget is crafted, it will have to start including the annual repayment of the $1.5 billion debt incurred this past year to pay for the FY2016-17 budget shortfall. The state will need another $115 million to cover that annual payment.

When asked about the one-time funding included in this budget, Senate Appropriations Committee Majority Chairman Pat Browne, R-Lehigh, said: “In any $32 billion operation, there’s gonna be those components, since the vast majority of it is recurring revenue. Our projections for next year show that if we stay within current spending trends, even if we go a little higher than current spending trends, there won’t be a need for a conversation about revenue next year, even with some of the one-time revenues that are in here.”

“At our spending that we’re proposing, which is below the so-called TABOR (Taxpayer Bill of Rights) fiscal sustainability measures, we’re balancing at our current revenue capacity, and we’ll be able to do that in the subsequent year with spending at the same trends,” added Browne.

Costa wasn’t as confident about state revenues performing well enough to cover all the one-time components of the state budget, but he said they’ll “be able to cover most of that.”

PA HOSPITALS STILL SAY THEY’RE GETTING THE SHORT END OF THE STICK

Although plenty in the state Capitol were expressing happiness with the outcome of the budget process, Pennsylvania hospitals restated the concerns they initially offered when they objected to the 60-percent tax hike included in Wolf’s budget proposed in February.

Within the agreed-to budget, instead of a $130million increase of the Quality Care Assessment charged to hospitals, the increase now appears as though it will be $75 million … which still isn’t acceptable to the hospital community that already pays $220 million.

Said Hospital and Healthsystem Association of Pennsylvania president and CEO Andy Carter: “The hospital and health system community drove the creation of the Quality Care Assessment during the 2010 budget. The program is designed to leverage federal Medicaid funding for hospital payments and provide support for the state’s general fund. Since fiscal year 2011, hospitals and health systems have contributed more than $1 billion to address budget shortfalls, and this budget will mark the fourth time that hospitals have committed to help stabilize the state’s finances by providing new and flexible tax revenue.

“The hospital community understands the need for additional resources, but a $75 million increase in the amount of money going to the general fund is still unsustainable.

“As state policymakers continue their work, they need to understand what is at risk if such a jump remains in this budget plan. With a third of Pennsylvania hospitals operating with razor-thin margins, access to primary care and specialty services may be at risk, as hospital leaders may be forced to make difficult decisions about their futures.

“We cannot let the needs of the general fund rob the hospital community’s potential to invest in health care.”

Capitolwire Staff Writer Robert Swift contributed to this story.                      

Questions, contact RCPA Director of Government Affairs Jack Phillips.

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Today, the Pennsylvania Department of Labor and Industry has released their proposed rule making response to Governor Wolf’s proposal to modernize outdated overtime rules to strengthen middle class families and provide fairness to workers.

Members are asked to review the proposed regulations and are encouraged to provide comments to the Department. If members do submit comments, please send those comments to RCPA. Contact RCPA Director of Government Affairs Jack Phillips with questions.