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Number 3
February 7, 2014

www.pacounties.org

LEGISLATIVE BULLETIN

An e-newsletter of the County Commissioners

Association of Pennsylvania

Serving Counties Since 1886

In This Issue

Governor Releases FY 2014-2015 Budget Proposal

Agriculture and the Environment

Alcohol, Tobacco and Other Drugs

Child Welfare

Community and Economic Development

Homeless Assistance Program

Human Services Development Fund

Judiciary

Juvenile Detention

Libraries

Long-Term Care

Medical Assistance Transportation Program

Mental Health and Intellectual Disabilities, Early Intervention and Autism

Transportation

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Dear

GOVERNOR RELEASES FY 2014-2015 BUDGET PROPOSAL

On Tuesday, Feb. 4, Gov. Corbett announced his fiscal proposal for FY 2014-2015 before a joint session of the House and Senate. His overall spend of $29.4 billion represents an increase of $926.8 million or 3.3 percent over FY 2013-2014.

The budget proposal relies on several new or pending revenue sources, including $125 million in savings from the Governor's proposed changes to the state's Medicaid program through Healthy PA, which must be approved by the federal government. Another $75 million in revenue would come from non-surface impact natural gas leasing in state forests and park lands, and $20 million would come through legalization of keno. There are no general tax increases, and the Governor's proposal continues the phase out of the Capital Stock and Franchise Tax. He also reaffirmed his commitment to reforming the state liquor system.

The Governor focused his budget address on his priorities of education, jobs and health care. Education funding would increase, with $400 million in new funding for school districts, including a $241 million Ready to Learn block grant to focus on student achievement and academic success. With ever-present challenges of rising state and school employee pension payments - more than $600 million in FY 2014-2015 - the Governor also asked the General Assembly to work with him on a pension reform plan to help smooth contribution increases.

The Governor announced his intention to expand the Human Services Block Grant Program to all interested counties in FY 2014-2015, a proposal supported by the Association. The block grants, currently available to 30 counties, allow counties flexibility to spend certain human services funds across program areas, increasing their ability to match available dollars to local need.

Still, line items in the Human Services Block Grant are largely level funded for the second straight year, following the ten percent cut in those lines in FY 2012-2013. As part of CCAP's 2014 priority on human services funding, counties are calling on the Governor and the General Assembly to begin a three-year restoration of the $86 million in reductions to the line items included in the Human Services Block Grant. Without restoration to FY 2011-2012 levels, counties will find it difficult to continue to serve the commonwealth's most vulnerable citizens.

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

AGRICULTURE AND THE ENVIRONMENT

The Governor proposed a $1.5 million increase for the Agriculture College Land Scrip Fund, which includes funding for Penn State Extension. Although the additional funds are proposed to be used as matching grants, no formal process or structure has yet been developed or approved. County fairs are proposed to be level funded at $3 million, while the State Food Purchase Program would see a $100,000 reduction. Details on funding for farmland preservation were unavailable as of press time.

Funding for gypsy moth control, black fly and West Nile virus prevention programs would see nominal reductions under the Governor's plan. In addition, the Governor proposed level funding for conservation districts, maintaining $3.375 in total General Fund dollars from the departments of Agriculture and Environmental Protection. Conservation districts are also set to receive $7.5 million annually under Act 13 of 2012, with adjustments based on inflation going forward.

ALCOHOL, TOBACCO AND OTHER DRUGS

The proposal calls for a slight increase in funding for the Department of Drug and Alcohol Programs and flat funding for the Behavioral Health Services Initiative (BHSI) funded through the Department of Public Welfare; CCAP is awaiting confirmation of numbers for Act 152 funding. While funding would generally remain stable, no new resources are proposed to address the epidemic of overdose and prescription drug abuse, another CCAP priority for 2014. In addition, a slight increase has been proposed for prevention and outpatient treatment for individuals with gambling addiction. However, funding for tobacco prevention and cessation is proposed to be reduced, and CCAP is working to determine the impact of recent court decisions on this funding stream.

CHILD WELFARE

The Governor's proposed budget increases funding for county child protective services by $28 million over FY 2013-2014 to assist in implementing the numerous changes to the Child Protective Services Law under recently enacted legislation, as well as cover other service increases. The budget proposal also includes an increase of $5 million for the development of the state's child welfare information system. Many of the community-based programs that assist in supporting families, such as the Children's Justice Act, the Nurse Family Partnership and family centers are proposed to be level funded.

COMMUNITY AND ECONOMIC DEVELOPMENT

The Governor's budget proposal brings funding for the Center for Local Government Services to $8.5 million, an increase of more than $1 million. The Municipal Assistance Program, which funds shared service, community planning and flood plain management activities for local governments, would be level funded at $642,000. A $5 million increase would be directed to the PA First program, focused on investment and job creation in Pennsylvania. Funding for tourism marketing would increase by $1.25 million under the proposal, and the Office of Open Records would see a boost of nearly $300,000.

HOMELESS ASSISTANCE PROGRAM

Funding to provide temporary shelter to homeless individuals and rental assistance to those in danger of becoming homeless is proposed to remain at $18.5 million. However, services have been greatly reduced based on cuts in previous years, including a 10 percent cut in FY 2012-2013.

HUMAN SERVICES DEVELOPMENT FUND

HSDF is proposed to be level funding at $13.5 million. HSDF funding allows counties to use dollars not only where they are most needed, but where they can best reduce costs to human service programs in the long run. For counties to optimize services to those in need, the Association seeks restoration of HSDF funding to FY 2011-2012 levels of $15 million.

JUDICIARY

The Governor's budget request maintains levels of funding from FY 2012-2013 for most judicial line items that impact counties, including court cost reimbursement. Juvenile probation services would receive a $2.5 million increase and intermediate punishment treatment programs are slated for a $2 million increase. Adult probation funding would remain at $16.2 million.

There is no direct allocation for district attorney salary reimbursement, but a permanent court fee surcharge was imposed in 2009 to raise funds for the commonwealth share. As a 2014 priority, counties are supporting a line item in the state's FY 2014-2015 budget that is sufficient to bring payments to all 64 eligible counties current, which would require about $7 million.

JUVENILE DETENTION

Funding levels for juvenile detention are unavailable at press time. The Department of Public Welfare will provide a breakdown of the specific funding levels contained in overall budget line items within the next few weeks. Counties have continued to evaluate their utilization at the local level and have adjusted their capacity to minimize unnecessary costs.

LIBRARIES

In the Department of Education, the public library subsidy would see a $500,000 increase, bringing the total to a little more than $54 million.

LONG-TERM CARE

Medicaid payment rates for nursing homes have not been released for the proposed FY 2014-2015 budget as of press time. Although the rates were increased by two percent in FY 2013-2014, years of stagnant rates have resulted in a wide gap between the cost of caring for Medicaid patients in nursing homes and the amount that is reimbursed, and counties will be supporting additional funding to improve rates.

As in prior years, 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 increase to $251.7 million (utilizing increased lottery funds of $162.6 million), with another $300.6 million in federal funds. It is not yet clear at press time if the additional lottery funds are tied to a separate initiative. In addition, long-term care managed care is proposed at about $225 million; this 20 percent increase over the FY 2013-3014 figure is promising news for nursing homes treating clients covered by managed care.

The state's projected long-term care funding for FY 2014-2015 of $841.4 million represents a slight increase, but when combined with federal matching numbers of more than $2 billion, there is an overall nominal decrease proposed in total funding. Nursing home assessment funds are proposed to be slightly higher at $473 million, and lottery funds are held flat at $309 million. Tobacco funds have been increased by almost 66 percent for MA long-term care to total $157.9 million. Relief from the county share requirement for nursing homes will continue to be provided by the Certified Public Expenditure (CPE).

MEDICAL ASSISTANCE TRANSPORTATION PROGRAM

The Governor's proposal includes a revised MATP allocation for FY 2013-2014 of $63.3 million, based on utilization and gained efficiencies. While the FY 2014-2015 proposal includes a ten percent increase in state funding based on the revised allocation (up to $69.5 million), when combined with federal match funds the total funding increase for MATP is less than one percent. CCAP will continue to monitor the program and feedback from counties to assure the funding allocation is adequate to cover program costs. Counties will also continue to work with DPW to develop cost containment initiatives and improve the quality of the program.

MENTAL HEALTH AND INTELLECTUAL DISABILITIES, EARLY INTERVENTION AND AUTISM

The county mental health base and Behavioral Health Services Initiative line items were essentially flat funded, maintaining the ten percent cut imposed in FY 2012-2013, though there is an increased commitment of state dollars to offset federal reductions. The proposal includes several special initiatives in these programs, including a waiting list initiative for ID and adult autism services, and funds to move individuals from state hospitals and state ID centers to the community system.

General Fund county ID base funds, often used to serve individuals who are not enrolled in Medicaid waivers, were reduced by $1 million in the budget proposal as a result of increased waiver funds. Counties are concerned about this reduction because, in spite of several annual waiting list initiatives, significant unmet needs and a lengthy waiting list remain. County base ID dollars are used to provide basic supports to individuals and families while they wait for waiver services.

The budget also includes a plan to delay an additional month of payment to physical and behavioral health managed care organizations (MCOs) until FY 2015-2016. In Pennsylvania, 43 counties hold the contracts with the behavioral health MCOs in HealthChoices and issue payments to the MCOs. Counties and their behavioral HealthChoices oversight partners are evaluating cash flow impacts and have asked the Department of Public Welfare to consider modifying the timing of the delayed payment month to the middle of the fiscal year.

Early intervention would receive an increase in state funds under the Governor's proposal to continue the current program and offset federal funding reductions; counties serve children ages 0-3 with developmental delays through this program and also provide matching funds for state dollars. The funding level for autism services would be increased to continue the current program and serve 100 additional adults with autism.

TRANSPORTATION

The comprehensive transportation funding plan enacted under Act 89 of 2013 will increase overall funding for roads, bridges, transit systems and other infrastructure by $2.3 billion over a five-year period. The budget proposal reflects the first year increases under the Act, including a $252 million increase in mass transit funding (capital, asset and operating funds), and an increase from $30 million to $97 million in multimodal funds. The proposal reflects the shift in county bridge funding from the half cent gas tax to the 4.17 mill allocation from the oil franchise tax. With the lifted oil franchise tax cap, the county and forestry bridge millage yields an additional $6 million for FY 2014-2015. Those funds, along with the special $5 million bridge allocation retained from Act 44, will be distributed based on relative square footage of county owned bridges.

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