Tags Posts tagged with "PA State Budget"

PA State Budget

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Over the weekend, the House failed to pass SB 1071, which is the hybrid pension bill, by a vote of 52/149 with no support from the Democratic Caucus and over 60 Republicans. After the vote, numerous meetings were held among leadership. Once the meetings concluded, the House floated the possibility of forging ahead with some type of stopgap measure that would fund education and human services. However, the governor and Senate leadership indicated that a stopgap budget was a non-starter.

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According to sources, it appears the caucuses have a framework in place for the 2015/16 state budget. The proposed plan would spend an additional $350 million for basic education, an additional $50 million for special education, and a 5 percent increase in funding for higher education.

In the potential budget deal, there will be additional property tax relief. Terms were still being negotiated on how the additional education funding will be distributed. Additionally, officials are trying to impose caps on how much school districts can raise property taxes in the future.

The potential budget deal would include:

  • An increase in state spending up to $30.7 billion; that would be a 6 percent increase from last year’s approved budget.
  • $500 million in slot-machine gambling revenue that is currently passed along to homeowners as school property tax cuts. That money would be diverted into a restricted account to pay for public school employee pension obligations.
  • The loss of the slot-machine money for school property tax cuts would be replaced by about $2 billion expected from a state sales tax increase to 7.25 percent, up from the current 6 percent. The rate would rise to 8.25 percent in Allegheny County, where it is currently 7 percent, and to 9.25 percent in Philadelphia, where it is currently 8 percent.

The proposed budget would not include a new tax on Marcellus Shale; however, a cigarette tax and a tax on banks were still being discussed as potential revenue enhancements. Currently, there has been no specific mention of dollar amounts for health and human services, or providers being reimbursed by the Commonwealth for interest payments being made on loans that providers took out to continue health and human services.

Despite a possible agreement, legislators are still cautious about any last minute hiccups that might derail a potential budget deal. The budget deal could blow up if the governor and legislators cannot come to terms on how new money for schools and property tax cuts would be distributed to each district, and how to further limit the ability of school boards to raise taxes as part of the package of new money.

Some of the other budget highlights include:

  • On pensions, the traditional pension benefit would survive, but newly hired public school and state government employees would get a diminished traditional pension benefit, plus a new, 401(k) style plan with a 2 percent contribution. According to estimates, this plan would save the state $12.5 billion in the coming decades.
  • Changes to the state-controlled wine and liquor system were still under discussion, although the sides have agreed to make it part of an overall budget deal.

RCPA will provide updates on any budget deal, and encourages members to continue to contact the governor and state legislators to inform them why it’s necessary for them to pass a state budget sooner rather than later. Contact Jack Phillips with any questions.

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Last week, the State Senate passed two funding bills, SB1000 and SB1001, on party-line votes. These bills would authorize short-term funding for health and human service providers as well as education. The funding would be retroactive to July 1, the start of the current 2015/16 Fiscal Year, and would last until the end of October, 2015

After passing the Senate chamber, the two short-term budget bills were sent to the House. The bills are scheduled for final passage on Thursday, September 24, and then they will be sent to the governor for his signature.

According to the governor and Democrat leadership, the stopgap budget bills do not solve the problem. Democrats argue that the budget passed by Republicans in June was ineffective and the governor had every right to veto it. Furthermore, they assert that passing short-term funding bills based upon the vetoed budget is unwise, when the governor has proposed something comprehensive and even better. Democrats also contend that an approved stopgap would make it less likely for negotiations with Wolf, who has said he will veto the stopgap, to produce a full budget.

Republicans maintain that passing temporary funding for schools and human service agencies makes sense and negotiations would not stop just because stopgap funding was approved. Republicans are asking why those who need state dollars should be forced to wait for at least some funding while the Republicans and the governor work on a permanent budget.

RCPA has been, and continues to be, concerned about the effects of a late state budget on health and human service providers. The state budget stalemate between the General Assembly and Governor Wolf is having real and lasting effects on these providers and the people they serve across the Commonwealth.

RCPA supports the stopgap funding. The association has been in contact with the General Assembly and the governor’s office, encouraging them to pass and sign the stopgap funding bills into law, so health and human service providers can continue services to the most vulnerable individuals throughout Pennsylvania.

In anticipation of both bills’ final passage in the House, RCPA is strongly encouraging members to contact the governor today, to encourage him to sign the stopgap bills, as was done by Governor Rendell in 2003 and 2009, until a compromise can be reached on a permanent spending plan for FY 2015/16.

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As most, if not all of you are aware, the General Assembly passed an on time version of their state budget yesterday, and it was quickly vetoed by the governor.

The Republicans in the House and Senate were able to pass the general appropriations bill and the accompanying code bills necessary. The House and Senate also made history by passing a bill which will privatize the state liquor store system, and being able to pass a pension reform bill. They used the privatization and pension reform bills, as well as one-time fixes, to provide the necessary revenue for their budget. The governor vetoed the general appropriations bills and the code bills, and he is determining whether he will sign or veto the privatization and pension bills.

In his press conference last night, the governor conveyed his belief that the Republicans used shoddy math and smoke and mirrors to pass a balanced budget. He also believes that the general appropriations bill that was sent to him did not include enough funding for education; therefore the Governor used his veto power.

So, where does that leave providers? It leaves a lot of providers in the unenviable position of trying to plan their budgets without the certainty of when state funding will be forthcoming, or how much state funding will be available for programs. Please see Budget FAQs for further information on how the budget impasse will affect providers.

The governor has asked Republican and Democrat leadership to sit down with him at the negotiation table, starting today, to find common ground on education funding, an extraction tax, property tax reform, and other revenue enhancement proposals. During this negotiation process, between the Governor and the four leadership caucuses, RCPA will continue to meet with elected officials to advocate for additional human service funding.

RCPA will continue to update the membership regarding the ongoing budget negotiations. We ask you, your employees, and the families that you serve, to contact your legislators and the governor to tell them why it is imperative to fully fund human service programs in a timely fashion, and if they do not, how it will affect your business and the services you provide to the most vulnerable residents of the Commonwealth. When communicating with elected officials, please use the RCPA policy papers regarding RCPA budget priorities and the effects of a late state budget.

Additionally, we encourage our members to send in letters to the editor; feel free to use this as a template for one of your own. Contact Jack Phillips, RCPA director of government affairs, with questions.

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As of today, it appears that budget talks between the Governor and the General Assembly have stalled. Republican legislative leaders say they are ready to start moving a budget this weekend to approve before the fiscal year ends.

The Republicans in the House and Senate continue to look at pensions and privatizing/modernizing the state liquor store system for revenue. The governor is still looking for property tax reform, possible personal income tax increases, and an extraction tax.

Senate President Pro Tem Joe Scarnati has indicated that the Republican budget would not contain a tax increase and more details will emerge as the budget moves forward. The Republican budget bill would rely on revenue from liquor privatization, and savings from public pension reform, but the proposed budget would not reduce the amount the state contributes to the pension systems. Republicans might also be looking at new recurring revenue by changing how the Commonwealth levies a Gross Receipts Tax (GRT) on Medicaid Managed Care Organizations. The Federal Centers for Medicare and Medicaid Services (CMS) has told Pennsylvania the way the Commonwealth levies the GRT is inconsistent with applicable federal statutory and regulatory requirements. The Commonwealth was given until November 30, 2016, to make the necessary changes to its GRT.

Some additional details of the proposed Republican budget include: no additional dollars to the wait list or the county human block grant program. Please do not panic! While the Republicans will pass a budget by June 30, it has come to our attention that the governor is planning to veto the entire Republican budget. If the governor holds onto this veto pledge, then there will be a late state budget. The governor and Republican leadership will have to go back to the negotiation table to find common ground, because Republicans do not have the required votes to override the governor’s veto. During that negotiation process, RCPA will continue to meet with elected officials to advocate for additional human service funding.

RCPA will continue to update the membership regarding the ongoing budget negotiations. We ask you, your employees, and the families that you serve to contact your legislators and the governor to tell them it is imperative to fully fund human service programs and to pass an on time budget, and if they do not, how it will affect your business and the services you provide to residents of the Commonwealth. When communicating with elected officials, please use the RCPA policy papers regarding RCPA budget priorities and the effects of a late state budget.

Contact Jack Phillips, RCPA Director of Government Affairs, with questions.

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As of today, budget talks are still ongoing. The General Assembly is looking at pensions, online gaming, and privatizing/modernizing the state liquor store system for revenue. The governor is still looking for property tax reform, possible personal income tax increases, and an extraction tax. If the governor and the General Assembly cannot come to an agreement, the General Assembly has indicated that they will pass and send the governor an on-time budget by the June 30 deadline.

If this occurs, one of two things can happen. One, the governor signs the budget bill on time and the General Assembly will go home for the summer, or two, the governor receives the bill and within ten days he may to decide to sign the bill, line item veto parts of the bill, or veto the bill entirely. If the governor decides to use his veto power, then there will be a late budget and the governor and General Assembly will go back to the negotiation table.

In a late budget scenario, our providers will not be able to plan effectively. Member providers may not have sufficient cash balances to provide services to clients, pay staff, and to pay day-to-day expenses. In most instances, when there are state funding delays, providers have to draw against their lines of credit. In today’s tough economic environment, providers are not as financially strong as they were the last time the Commonwealth had a late state budget, so providers will have more difficulties staying solvent.

RCPA is asking members to use the RCPA policy paper and contact your legislators and the governor to tell them it is imperative to pass an on time budget, and if they do not, how it will affect your business and the services you provide to residents of the Commonwealth.

Questions? Contact Jack Phillips, RCPA director of government affairs.