PathWays PA Special Budget Alert - February 10, 2010

Budget Update

Yesterday, Governor Rendell announced his budget proposal for the 2010-2011 fiscal year. The deficit for the fiscal year is $525 million (there was a $2 billion deficit last year).

In the FY 2010-2011 budget, the Governor is calling for overall spending of $26.3 billion. His budget maintains cuts from last year and does not create any new programs. The Governor also stated his commitment to having a budget signed by the constitutionally mandated deadline of June 30th - unlike last year's budget, which was passed 101 days late.

Under the proposal:

• Adult and Family Literacy will receive funding of $17,510,000 (which matches their current funding under the budget freeze)
• Child Care Assistance will receive $198,682,000 in funding (an increase of $535,000)
• Children's Health Insurance will receive $100,375,000 in funding (an increase of $3,263,000, enough to cover approximately 10,300 more children)
• Community Colleges will receive $214, 217,000 (level funding from the previous year)
• Community Services Block Grant will receive $29,500,000 (level funding from the previous year)
• Family Savings Accounts were zeroed out for the second year in a row
• Industry Partnerships will receive $1,710,000 in funding (a cut of $290,000)
• Minority Business Development was zeroed out (a cut of $1,000,000)
• Nurse Family Partnerships will receive $11,978,000 in funding (level funding from the previous year)
• Pre-K Counts will receive the $85,937,000 (a cut of $475,000)
• Women's Commission will receive $253,000 (an increase of $15,000)
• For more information, the Pennsylvania Budget and Policy Center has a full comparison of this year's budget to previous budgets on their website.

The Governor also called for some revenue to be placed in a Stimulus Transition Reserve Fund. This fund will be accessed once stimulus funds are no longer available. Revenue raising proposals include:

• Lowering the sales tax from 6 percent to 4 percent, but eliminating the sales tax exemption for some non-essential items. Under this plan, the sales tax exemption will continue for food, clothing, prescription drugs, and non-profits.
• Instituting a severance tax on natural gas extracted from the Marcellus Shale deposits.
• Instituting an excise tax on cigars and smokeless tobacco.
• Closing the so-called "Delaware Loophole" which allows state businesses to avoid paying the corporate tax levy by shifting their income and profits to other states. At the same time, the state's corporate net income tax will decrease from 9.99 percent to 8.99 percent.

Action Alert: Complete the United Way of PA Survey on Impact of Budget Cuts and Impasse

The United Way of Pennsylvania has released a new survey to measure the long-term impact of Pennsylvania's 2009 Budget Impasse and continued funding cuts on nonprofit organizations.

They need everyone's help to document the impact to make the case that funding health and human services is vital. The 2010 state budget negotiations ahead are expected to be extremely difficult. State revenues are well below projections from only a few months ago, and the legislature is showing little interest for expanding current revenue sources or increasing taxes to maintain funding levels for nonprofit services.

Please complete this important yet brief survey and share it with the organizations in your network.


Local Stories

To complete last year's budget, Pennsylvania relied heavily on one-time revenue sources and service cuts. Those cuts are having a real impact on Pennsylvania families:

• Social Security supplement payments for 340,000 low-income elderly and disabled Pennsylvanians have been reduced, jeopardizing their ability to pay for food or medical care.
• An 80 percent increase in premiums (from $330 to $600 a month) for individuals buying into the state's adultBasic health care program is making coverage unaffordable for thousands of uninsured Pennsylvanians.
• Pennsylvanians, particularly children, have less access to libraries as hours are reduced and branches are closed.
• There are 4,500 fewer state government employees.

Specific Programs That Need Your Support

Please contact your state legislators today and let them know how important these programs are to you and to Pennsylvania:

Industry Partnerships - Industry Partnerships are consortiums that allow employers to improve and expand their workforce by bringing together companies committed to the development of their workforce. In Pennsylvania, more than 6,300 businesses are involved with more than 70 Industry Partnerships across the state. More than 70,000 workers have been trained since 2005.

CHIP - Cover All Kids - 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.

adultBasic - This program provides health insurance for adults to cover such needs as primary care, specialty care, hospitalization, emergency services, testing services, maternity care, and rehabilitation coverage. While there were 41,786 individuals receiving this benefit, the wait list is over 330,000. The wait list for the program has tripled over the past two years.

Child Care Work Subsidies - The subsidy allows 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. Over 16,000 are eligible for the child care subsidies but are currently on the waitlist, where some families remain for months.

Adult Education and Family Literacy - Adult education and family literacy program 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. 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.