On Tuesday, Feb. 5, Governor Corbett announced his fiscal proposal for FY 2013-2014 before a joint session of the House and Senate. His overall spend of $28.4 billion represents an increase of $679 million, or 2.4 percent, over the 2012-2013 approved budget. The Governor repeated his commitment to balancing the budget without tax increases and to refocusing investment in core government functions.

Funding for basic education is proposed to increase by 1.7 percent and higher education funding is kept at the current fiscal year level. New State Police cadet classes are funded at a level expected to train 290 troopers. Funding for disabled adult services is slated to increase by $40 million, and a waiting list initiative to support Pennsylvanians with intellectual disabilities would see an additional $20 million in funding.

Other lynchpins of the proposal include privatization of the liquor system, reform of the state and school pensions, and examination of ways to make the state prison, parole and probation agencies more efficient through the Justice Reinvestment Initiative.

County human services programs are slated for funding at levels consistent with the current fiscal year. The Governor has also announced his intention to expand the Human Services Block Grant Program to any county that chooses to participate, enabling additional counties beyond the 20 in the current pilot program to achieve flexibility and efficiencies that help in balancing historic underfunding in these important programs.

After a preliminary analysis of the governor's remarks and the proposed line items, CCAP appreciates that his proposal holds funding in most human services line items to at least current fiscal year levels. As part of CCAP's 2013 priority on human services funding, counties have noted that a decade-long pattern of underfunding and cuts in human services has led to serious consequences for program delivery. CCAP will work toward restoration of funding in FY 2013-2014 to at least the levels of FY 2011-2012, while continuing to work with the General Assembly and Administration to address the historic pattern of underfunding across human services line items and to ensure adequate human services systems are in place.

The governor also unveiled his long-anticipated transportation funding proposal, discussed in greater detail below.

CCAP has assembled a number of budget resources on its commonwealth budget web page, including a spreadsheet with the Governor's proposed funding levels for county line items and links to budget resources from the Governor and legislative caucuses. Highlights on line items of interest to counties follow.

The Governor's proposal calls for flat funding for all budget line items relating to substance abuse services. CCAP is awaiting confirmation of numbers for Act 152 funding and tobacco prevention and cessation, but anticipates that funding levels will be the same as current year. Intermediate Punishment programs funded through the Commission for Crime and Delinquency will be funded at the same level as current year.

State funding for county child protective services is proposed to increase by $23 million over the current year's budget. Many of the community-based programs that assist in supporting families, such as the Nurse Family Partnership and family centers, are at least level funded from the state, although some federal funding is reduced. 

Many programs through DCED remain level funded in FY 2013-2014, including Partnerships for Regional Economic Performance, Keystone Communities, and funding for municipal assistance, which includes land use planning and shared services. Pennsylvania First, aimed at investment and job creation, is proposed to receive a $10 million increase, bringing funding to $39.5 million, while housing affordability and rehabilitation enhancements are slated for a 35 percent cut.

Funding to provide temporary shelter to homeless individuals and rental assistance to those in danger of becoming homeless is proposed to remain the same as the FY 2012-2013, at $18.5 million. While funding remains stable this year, cuts over the past several years have greatly reduced available services to the homeless.  

HSDF is proposed to be funded at the same level as FY 2012-2013, $13.46 million, although still significantly below FY 2002-2003 when it was funded at $41 million. HSDF allows counties to use funds not only where they are most needed, but where they can best reduce costs to human service programs in the long run. 

The budget request includes a $5 million increase for juvenile probation, bringing that line to a total of $21.4 million. It maintains FY 2012-2013 funding levels for most judicial line items that impact the counties, including reimbursement for court costs and adult probation.   

Specific funding levels for juvenile detention are not yet known. The Department of Public Welfare will provide a breakdown of individual program funding levels within their overall budget over the next few weeks. While detention utilization has decreased in the last few years, there appears to be some recent stabilization in regions of the state. Counties continue to evaluate their utilization and have adjusted their capacity to minimize unnecessary costs.   

In the Department of Education, the public library subsidy is held level at $53.5 million.   

The proposed FY 2013-2014 budget offers some hope for nursing home funding, calling for a two percent increase in the Medicaid payment rates following three years of flat funding that has caused severe financial pressure on nursing homes. As in FY 2012-2013, additional funding sources such as the lottery fund, tobacco settlement, and nursing home assessment are being utilized to help support funding levels for long-term care.

Home and community-based services are proposed to be funded with $200.9 million in state funds and $252 million in federal funds, a slight increase from the current fiscal year. Long-term care managed care is proposed at about $184 million, a small increase over the 2012-2013 figure.

For nursing homes, the projected funding for FY 2013-2014 shows an increase in state funding up to $844.3 million with more than $2 billion in federal funds, in addition to some $473 million generated in nursing home assessment funds, another $88.6 million from the tobacco settlement and $309 million from the lottery fund. This also marks the first year in which no dollars are utilized from the Intergovernmental Transfer (IGT) program, which was phased out several years ago. Relief from the county share requirement for nursing homes that used to be provided by the IGT has been replaced by funds from the Certified Public Expenditure (CPE).   

State funding for MATP for FY 2013-14 has been proposed at $76.2 million, a nearly $7 million increase from the current fiscal year. Combined with program efficiency changes, this will likely prevent the type of funding crisis that occurred in FY 2011-2012, when the program was underfunded at $65 million. Counties have and will continue to work with the Department to develop and implement cost-containment measures.  

County mental health base dollars, intellectual disability base dollars and the Behavioral Health Services Initiative lines were all essentially flat funded compared to the FY 2012-2013 budget. However, the budget includes several special initiatives, such as a waiting list initiative for intellectual disability and autism services, and funds to move individuals from state hospitals to the community system.

The budget contains sufficient funds to annualize the waiting list initiative from FY 2012-2013, to cover costs for increased utilization, and to serve an additional 700 special education graduates and 380 individuals with emergency status on the waiting list. Counties will assist with placing individuals into this initiative as part of their waiver administration responsibilities. State funding for county ID base, which is used to serve individuals not enrolled in Medicaid waivers, was reduced by $350,000. While the mental health base line has been increased, none of that increase is proposed for county base funds; all additional funds in this line will go to the state hospital system and will provide $4.7 million for an initiative to move 90 individuals out of the state hospitals.

Early intervention received a $1.8 million increase in state funds to continue the program. Counties serve children ages 0-3 with developmental delays and also provide matching funds for state dollars. The autism services funding level continues the current program and allocates $1.5 million to provide services to an additional 118 adults with autism.  

The county liquid fuels fund, dedicated funds from Act 44 of 2007, and the Motor License Fund provide funding for county bridge and infrastructure projects. County liquid fuels are sales-based. The Motor License Fund proposed allocation to local road maintenance and construction projects increases by about $9.5 million, while Act 44 funding for county bridges is a statutory $5 million.  

Announced concurrent with the FY 2013-2014 budget, the Governor proposes to increase transportation funding in the amount of $1.8 billion annually over the next five years, by uncapping the oil company franchise tax. A multi-modal fund would be created within PennDOT to make investments across all modes of transportation, providing about $200 million for locally owned roads and bridges and $250 million for mass transit by the fifth year. Due to the nature of allocations formulas under the franchise tax, though, direct increases for county bridge funding are nominal as currently proposed, but the Governor and Transportation Secretary Barry Schoch indicated that the proposal is a starting point.

Increases are provided in mass transit operating and capital funding. The funding increases are accompanied by increases in local match requirements, although those can be offset by local initiative to participate in cost-saving measures, focusing on system consolidation.

The proposal also offers a number of innovative cost-savings programs, including ability of local governments to participate in a bridge bundling and management program, now being piloted in three counties, that projects significant reductions in local cost share costs.