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State Budget In Detail | | |
It's three days after the release of Governor Corbett's 2013-14 state budget, and everyone is still pouring through the fine print looking to see what is, and isn't, in the financial blueprint. The $28.4 billion budget is actually a $400 million, or 1 percent, increase over the budget that was in place when Corbett took office in 2011.
We heard the highlights during Tuesday's speech - increasing funds for education, intellectual disabilities, senior services, public safety and farming. We also heard about selling off the state liquor stores to give the money to schools, privatize the lottery to give the money to senior, overhauling the state pension system and turning down the Medicaid expansion under the Affordable Care Act.
 On presentation value only, the Governor's budget seems as if it is finally easing up after several years of belt-tightening. Programs across the board are seeing some modest increases over the previous year's budget. Nice to see, however much of the program spending increases do not rely on modest increases of tax revenue from a recovering economy, rather come from unproven, or one-time, revenue sources such as the sale of liquor stores or privatization of the lottery. And, when you consider that for two years most programs received drastic funding cuts - the modest increases still leave crucial services grossly underfunded.
But what does the budget really say? What are the real numbers, past the rhetoric? The following information is a compilation of information from a variety of resources, including CAAP's own analysis. Thanks to the Pennsylvania Budget and Policy Center for some of the detailed budget analysis.
In the General Fund revenue is projected to grow by $429 million, or 1.5%, from 2012 - 13. Much of this growth comes from sales tax ($405 million) and personal income tax ($293 million). Major changes are the repeal of the corporate loans tax (a tax on loans made by individuals to companies) and another increase in the net operating loss cap (to the greater of $4 million or 25% of taxable income) in 2014. Lost revenue from these changes would be offset by a tightening up of rules in the corporate net income, realty transfer and personal income taxes. Additional non-tax revenue is brought into the General Fund with proposed transfers totaling $34.5 million from the Motor License and Race Horse Development funds.
A proposed change to the corporate net income tax would have a long-reaching and substantial impact on how the General Fund is financed. The capital stock and franchise tax phase out will be complete in 2014, a loss of $604 million in the last two years. The budget proposes a similar rate "phase- down" beginning in 2015 for the corporate net income tax (CNIT). These reductions shift more of the responsibility for financing the General Fund from corporations to individuals.
Corporate taxes are projected to drop $311 million, or 5.9%, in 2013-14. This is largely due to the rate cuts and ultimate elimination of the capital stock and franchise tax in 2014.
Following articles will focus on separate state departments and line items that are of interest to Community Action Agencies. |
| | DCED Sees Slight Increases |  |
After years of deep funding cuts, community and economic development programs see a $16 million, 7%, increase in the proposed budget from the current year. Most of these increases relate to business development programs such as World Trade PA, Marketing to Attract Business, Pennsylvania First and the Commonwealth Finance Authority. Conversely, many community development programs are level-funded, while General Fund aid for fiscally distressed communities is cut by $5 million.
Specific line items of interest to Community Action:
|
Line Item |
2012-13 in 1,000's |
2013-14 in 1,000's |
Difference | |
CSBG |
29,500 |
29,500 |
$0 | |
SCDBG-disaster recovery |
27,143 |
15,000 |
-$12,143 | |
SCDBG-neighborhood revitalization |
24,000 |
17,000 |
-$7,000 | |
LIHEAP-weatherization |
31,000 |
31,000 |
$0 | |
DOE-weatherization |
20,000 |
10,000 |
-$10,000 | |
ARRA- DOE weatherization |
5,000 |
0 |
-$5,000 | |
Emergency shelter for homeless |
125 |
0 |
-$125 | |
Assets for Independence |
1,000 |
500 |
-$500 |
Main Street 34 34 $0
Elm Street 26 26 $0 |
| | Annual Conference Registration Open | | |
Check out information for the six general sessions and 29 workshops being offered in the new two day format.
Join your colleagues in Harrisburg on April 17 and 18 to increase your professional development and celebrate the 20 individuals that will receive awards during the 16th annual CAAP Self-Sufficiency Awards.
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| | Welfare's Rocky Road Smooths....A Little Bit | |
After several tumultuous years, the Department of Welfare has a surprisingly calm budget from Corbett. Flat funding or modest increases in some services see the DPW budget strangely lacking the controversy of years past.
The one exception is the continued assault on health care services. After eliminating General Assistance Cash Grants, the proposed budget includes major reductions in state-funded health care for GA eligible individuals. The proposal fails to build in the Medicaid expansion under the Affordable Care Act - an option that many Governors, including six Republicans, have deemed too good a deal to pass up.
In the child care corner, the budget once again includes a reduction in the Child Care Assistance line, which provides child care subsidy to recipients of Temporary Assistance for Needy Families (TANF), from $156.7 million to $152.6 million, a reduction of $4.1 million. Child care for working families (Child Care Services) will increase from $141.4 million to $148.5 million.
The budget includes two initiatives. A total of $7.1 million in savings from both Child Care Assistance and Child Care Services is reinvested in an expansion of the child care subsidy for working parents, which will remove 1,400 families from the waiting list. The Rising Stars Initiatives, which provides quality improvement to programs serving subsidized children in the Keystone Stars system, will increase by $3 million. Early intervention for children ages 0-3 will grow by $1.8 million, or 1 percent, to $128 million to support current program enrollment.
Mental Health services got a boost that made up for a portion of the 10 percent cut last. The 4 percent increase brings total funding to $689.3 million.
Intellectual disabilities received the most attention during the Governor's budget address. Much of the funding for people with intellectual disabilities was restored in 2012-13, and this budget includes new dollars to continue to replace lost services.
After eliminating General Assistance last year, this budget level funds cash grants.
Human services programs, which sustained cuts of 10 percent in 2012-13, made up some ground in the budget proposal. The Human Services Block Grant that combined seven human service programs will be expanded beyond the 20 county pilot. All counties can voluntarily be part of the program. Homeless Assistance and the Human Services Development Fund, two of the services in the human services block grant and sustained cuts last year, are funded at $13.5 and $18.5 million, respectively.
The Medical Assistance Transportation Program (MATP) will see a $3.38 million increase. This reflects higher costs per trip and increased utilization.
Specific line items of interest to Community Action:
|
Line Item |
2012-13 in 1,000's |
2013-14 in 1,000's |
Difference | |
MATP |
72,799 |
76,179 |
+$3,380 | |
TANFBG |
322,679 |
319,393 |
-$3,286 | |
LIHEABG |
320,000 |
320,000 |
$0 | |
Human Services DF |
13,460 |
13,460 |
$0 | |
Homeless Assistance |
18,496 |
18,496 |
$0 | |
Income Maintenance |
510,763 |
537,122 |
+$26,359 |
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| | Alexander Says Goodbye | |
Gary Alexander, Secretary of the Department of Public Welfare, announced that he is leaving effective February 15th. Deputy Secretary of the Office of Children Youth and Families, Beverly Mackereth will serve as acting secretary of the department.
In a letter to his DPW employees, Secretary Alexander wrote the following:
Dear DPW Employees,
Today, I share with you that I am leaving my post as secretary of Public Welfare on February 15. During my time at DPW, I have had the opportunity to meet many of you. I have found your stories of dedication to our most vulnerable citizens an inspiration as I worked through the difficult challenges facing us in the past two years.
With your help, we have been able to chart a new course for the Department of Public Welfare, focusing on program integrity and fiscal responsibility. Through these efforts, our goals for the department have been realized. The tough choices we have had to make in the past two years have resulted in our ability to now extend a helping hand to those who need us most. With Governor Corbett's leadership, we are targeting thousands of individuals to be removed from waiting lists for services. We can do this because with your help, we got our fiscal house in order. Please accept my warmest wishes as you continue your work for those who need us most and thank you for the opportunity to work alongside you as we navigated through difficult, but necessary reforms. Deputy Secretary of the Office of Children Youth and Families, Beverly Mackereth will serve as acting secretary of the department. Congratulations to Bev and please help me welcome her to her new role as acting secretary. |
| | State Food Programs Stay Flat | |
The Department of Agriculture lost $11.7 million in overall funding. Programs operated by Community Action Agencies, or serving their clients were mostly flat funded.
Specific line items of interest to Community Action:
|
Line Item |
2012-13 in 1,000's |
2013-14 in 1,000's |
Difference | |
Emergency food assistance |
4,000 |
4,000 |
$0 | |
Commodity supplemental food |
3,000 |
3,000 |
$0 | |
Farmers' market food coupon |
3,500 |
3,500 |
$0 | |
Senior farmers' market nutrition |
2,200 |
2,200 |
$0 | |
State food purchase |
17,338 |
17,338 |
$0 |
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| | Members in the News | | |
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| | Education Gets the Focus | |
The 2011-12 budget cut $841 million from public schools, almost 10 percent, and the 2012-13 budget left most of those cuts intact - forcing many school districts to cut programs and resulting in the loss of 20,000 teachers and support staff. The Governor's 2013-14 budget provides a small increase to the basic education subsidy, while increasing total education funding by $338.1 million to $10.9 billion. Funding for K-12 classrooms and higher education would remain well below 2010-11 levels.
The budget increases funding for Early Intervention for 3-5 year olds by $5 million to $222 million. Funding for Pre-K Counts would rise by $4.5 million, or 5%, and the Head Start Supplemental program would see a 5 percent increase to $39.2 million.
The budget includes an increase of $223.9 million for school employee retirement funding, a cost paid both by the state and local school districts, from $856 million in 2012-13 to $1.08 billion in 2013-14. The amount is below the estimated $411 million increase required under current law, but the plan includes savings of about $140 million from proposed pension changes. The Governor's pension proposal would reduce the future benefits of current teachers and state workers and enroll new employees in a defined contribution plan, similar to a 401(K) plan. Some funding increases in the budget are conditioned on these pension savings, which may not be enacted by the Legislature or could be challenged in the courts.
Specific line items of interest to Community Action:
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Line Item |
2012-13 in 1,000's |
2013-14 in 1,000's |
Difference | |
Pre-K counts |
82,784 |
82,784 |
$0 | |
Head Start Supplemental |
37,278 |
39,178 |
+$1,900 | |
Early Intervention |
216,973 |
221,973 |
+$5,000 |
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| | News from NCAF | |
Weatherization Funding Is Now a Sierra Club Action Item  NCAF announced that the 2.1 million member national Sierra Club is joining the fight to save a viable Weatherization program. It is the first major environmental group to put the program's well-being on the to-do list for a vast grassroots network of activists. NCAF will continue to work with other environmental organizations that might put W.A.P.'s funding crisis on their action agenda, too.
The Sierra Club goal is the same as NCAF's, a base funding of $300 million for W.A.P. They are helping make the case that the W.A.P. budget is a barometer of the fairness of the Administration's energy policies; at present, the White House supports billions of dollars in tax incentives directed to families that can update their homes, windows and equipment, but less than the 2008 funding level for W.A.P. See the grassroots campaign.
The Sierra Club letter is similar to those NCAF delivered to the Secretary of Energy and the White House a few weeks ago. |
| | Five Days a Week | | |
The U.S. Postal Service will stop delivering mail on Saturdays but continue to deliver packages six days a week under a plan aimed at saving about $2 billion, the financially struggling agency says.
The move, set to start in August accentuates one of the agency's strong points - package delivery has increased by 14 percent since 2010, officials say, while the delivery of letters and other mail has declined with the increasing use of email and other Internet services. The change could save the agency $2 billion anually.
Under the new plan, mail would be delivered to homes and businesses only from Monday through Friday, but would still be delivered to post office boxes on Saturdays. Post offices now open on Saturdays would remain open on Saturdays.
Over the past several years, the Postal Service has advocated shifting to a five-day delivery schedule for mail and packages - and it repeatedly but unsuccessfully appealed to Congress to approve the move. Though an independent agency, the service gets no tax dollars for its day-to-day operations but is subject to congressional control. |
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