PathWays PA Special Budget Alert - July 23, 2009

PathWays PA Budget Alert!

We are currently in the fourth week of the fiscal year and yet the Commonwealth is still unfortunately without a budget. While budget proposals now head to a House-Senate Conference Committee, important programs are especially at risk of being cut. Legislators have expressed surprise at not hearing from their constituents on certain important issues. It is incredibly important to keep reminding your legislators of what programs Pennsylvania cannot afford to cut.

If you are upset about these budget proposals, which include cuts ranging from education to hospitals to the elimination of the Industry Partnership program, please tell your legislators how you would finish this sentence: “If the choice is between reducing/eliminating spending on hospitals, burn units, Industry Partnerships, and childcare, or increasing revenues, I would support…”

During this recession, some budget cuts are inevitable. But too many cuts will lead to long-term impacts on our families, our health, and our economy at a time when we can’t afford to do without.

For more information throughout the week on the budget and other issues, be sure to check out the PathWays PA Policy Blog.


The Local Effect of Budget Proposals

As the budget process moves on, we decided to look at how the delay and some of the budget proposals truly impacts different parts of the state.

The Altoona Area School District is planning to reduce its full-day kindergarten program in response to the proposed budget cuts. Under Senate and House proposals, a 26 percent cut in an Accountability Block Grant is possible. The effects of this reduction could be widespread. In the short term, this could impact the ability of parents to afford to work because of child care costs. In the long term, high school dropout rates could increase and the number of graduates going to college could decrease because students were not able to receive proper early-childhood education.

Philadelphia will be delaying payment to thousands of vendors and suppliers ranging from firms that outfit City Hall with pencils and staplers to nonprofits that run summer programs and camps. Depending on the final budget, other effects include:

• Philadelphia relies on state dollars for much of its municipal budget, so if lawmakers slash spending, it will reverberate throughout city government.
• The Department of Human Services relies on state dollars for 60 percent of its budget. If state lawmakers cut that spending, the city will be forced to scale back services for at-risk youth. That could mean major cuts in programs that help prevent crime and keep kids safe from abuse.
• Philadelphians will probably have to deal with thousands of city employee layoffs, including police and firefighters. It is likely that hours at city facilities, like libraries and recreation centers, will be drastically cut or eliminated. Trash collection may even be reduced to twice a month or less.

Lancaster County government cannot pay its network of 400 social service providers. By not having a new budget by the June 30 deadline, funding normally transferred to counties for programs such as drug and alcohol treatment, troubled children, and mental health care have stopped flowing.

Blair County government is implementing employee furloughs and a local nonprofit agency is shutting a housing assistance program for seniors in order to deal with anticipated budget cuts.

Montgomery County Commissioners have created a Budget Review committee tasked with avoiding tax increases through the elimination of full-time staff, and other budget cuts despite increased public demand for government services.


CHIP – Cover All Kids

Take Action! During the past three years, CHIP has provided comprehensive health insurance coverage for thousands of children throughout Pennsylvania who would not have been eligible without the Cover All Kids program.

• However, current budget proposals rescind this CHIP provision, which could result in up to 12,000 kids being cut from the program.
• Even during an economic crisis, it is important to pay attention to the long-term effects of short-term cuts.
• A recent report from Rice University puts the cost of health insurance through age 18 at $7,451, while the benefits equate to as much at $15,000.

Industry Partnerships

Take Action! Industry Partnerships are consortiums that allow employers to improve and expand their workforce by bringing together companies committed to the development of their workforce.

• This program provides workers with access to training that gives them the skills necessary to maintain jobs and obtain employment with sufficient wages so workers can adequately support their families.
• In Pennsylvania, more than 6,300 businesses are involved with more than 70 Industry Partnerships across the state and more than 70,000 workers have been trained since 2005.
• On average, those workers have seen their wages rise by 6.62 percent within the first year after receiving the training.
• Read more about how the Industry Partnership program is helping in one county

Child Care Work Subsidies

Take Action! The Child Care Works Subsidies allow parents to afford to work by assisting them with the expense of child care.

• For many parents the cost of child care may be more than they bring home in a paycheck.
• Currently in Pennsylvania, over 16,000 are eligible for the child care subsidies but are currently on the waitlist, where some families remain for months.
• In the meantime, they must pay more than they can afford for child care, provide childcare through an unreliable patchwork of friends, family, or substandard facilities, or risk losing their jobs at a time when employment is hard to find.
• For more information please see a new report from PCCY, “Child Care Works, A Program with a Growing Need”

Adult Education and Family Literacy

Take Action! Adult education and family literacy are especially important during this recession to ensure that families have the opportunity to gain the education they need to be or become self-sufficient. In Pennsylvania, the Senate proposal cuts adult literacy by 29% and the House is considering a 12% cut. Please contact your representatives today to let them know the importance of this program!

• These services have seen an increased demand in recent months.
• According to a new report from the Philadelphia Workforce Investment Board, over 202,000 adults in Philadelphia do not have a high school diploma, and 40 percent of Pennsylvania adults struggle with basic literacy skills.
• Overlooked and Undercounted: Struggling to Make Ends Meet in Pennsylvania shows that 40.9 percent of all Pennsylvania households have a high school education or less, and of those households, 49% of those with less than a high school education earn less than the Self-Sufficiency Standard

Budget Update

Over the weekend, the House passed House Bill 1416, which moved the higher education line items out of the general fund budget and into a new Higher Education Fund. It also made cuts to the Governor's proposal by cutting funds from such programs as Pre-K Counts, Early Intervention, Maternal and Child Health, and Teen Pregnancy and Parenting.

On Monday, the Senate approved an amended House Bill 1416. The amendment reincorporates the higher-education funding that was set aside in the House Bill and calls for $1.7 billion in one-time revenues to be taken from the Rainy Day Fund, the Health Care Provider Retention Account, and the tobacco endowment fund, to name a few. The Amendment then makes additional cuts, similar to those in the Senate’s original budget proposal, Senate Bill 850. These cuts include the elimination of the Industry Partnership program, severe cuts to Adult and Family Literacy programs, CHIP, Child Care Assistance, and other critical programs.

On Tuesday, the House voted to defeat the Senate Amended House Bill 1416. The budget discussions will now be sent to a House-Senate Conference Committee where negotiations will continue.