Last Tuesday, Governor Corbett announced his 2013-14 budget proposal. Since 2011, the Governor has made drastic and deep cuts to many essential state programs and services, which has contributed to Pennsylvania’s recent trend of growing unemployment and slow crawl out of an economic recession.
Although Governor Corbett’s most recent state plan contains the restoration of some reductions from previous years, the majority of the Governor’s proposal is based on unsure funding sources and the uncertain passage of privatizing state programs.
Overall, Governor Corbett has announced a plan that calls for a $28.4 billion budget, which represents an increase of $400 million, or 1 percent, from the budget in place when he took office in 2011. Here are some of the highlights:
Funding for early education programs increased by approximately $11 million: $5 million for early intervention programs, $4.5 million for Pre-K Counts, and $1.9 million for Head Start.
Basic Education – K-12
Under the Governor’s plan, basic education funding would increase $90 million as well as an allocation of $224 million for schools’ increasing retirement costs.
This proposal also marks the first time that the Governor has proposed funding for the Education Block Grant, which the Legislature has wrangled him into funding the last two budgets. The $100 million earmarked for the block grant during this upcoming fiscal year is about what has been allocated in the last two budgets.
However, many aspects of funding for basic education are tied to such things as pension reform and privatizing Pennsylvania’s state store system. If the Governor is successful in selling off the liquor business to private companies, only then would Pennsylvania schools be eligible for $1 billion in grants over the next four years to use towards school safety, improve early education, individualized learning and science, technology, engineering and mathematics (STEM) programming.
Furthermore, the Governor’s plan diverts new teacher hires from the traditional pension system into a 401(k)-style defined contribution plan and changes how benefits are calculated for current employees starting in 2015. While those changes would not take effect in the next fiscal year, the plan would reduce state expenses immediately and would save $175 million for the state and $138 million for school districts next year. However, if a plan is not passed, the state will not have the $175 million to spend and will have to find an additional $175 million to cut.
Under the Governor’s proposal, funding for state-owned universities, state-related universities and community colleges would remain the same as last year’s funding levels with an allocation of $1.2 billion. As you may recall, under Governor Corbett’s 2011 budget, state-owned and state-related universities endured a 20 percent funding cut.
Human Service Programs
About $40 million is being proposed for services that help people with intellectual and physical disabilities live independently under the Governor’s plan.
The budget includes an increase of $7 million for child care services and $8.5 million to enroll an additional 9,300 uninsured children in the successful Children’s Health Insurance Program (CHIP).
This budget will provide an additional $50 million in Lottery Funds for such programs as Area Agencies on Aging (AAA), Attendant Care Services, modernize facilities and senior centers, and increase services for individuals served through the Medicaid Home and Community-Based Aging Waiver. However, the fate of these proposals depends upon the uncertainty of what will occur should the management of the Pennsylvania Lottery be outsourced to the British corporation Camelot.
The Governor’s budget also proposes the biggest tax revenue increase of his tenure: the lifting of the $1.25 per gallon Oil Company Franchise tax. The cap will be lifted over five years, and partially offset by two 1-cent-per-gallon reductions of the state motor fuels tax in each of the next two years.
In a cost-saving effort, the budget also calls for vehicle registrations to be switched to biennial from annual, and driver’s licenses issued for six years instead of the current four year license.
Following a full phase in of the Governor’s proposed transportation plan, these changes are anticipated to generate $1.8 billion in new revenue with $550 million available in the 2013-14 fiscal year, funds that can go towards things like roads, bridges and mass transit.
As I have highlighted, Governor Corbett’s proposed 2013-14 budget is just a starting point based upon the premise of several hypothetical maneuvers occurring before the funding source is available for many of the programs he outlined. There is a lot of improvement that needs to take place in the coming months. One of the biggest areas that needs to be reevaluated is the Governor’s agenda to privatize and link so many state programs and their funding to the implementation of selling off state assets. In other words, the Governor’s plan has no guarantees that major programs and services will actually receive the proposed increases in allocations.
Furthermore, Governor Corbett’s rejection to expand Medicaid in Pennsylvania under the auspices of the federal Affordable Care Act will leave hundreds of thousands of individuals and families without health insurance and the budget proposal has not taken into consideration how to assist these citizens going forward. We should take advantage of the federal government’s willingness to cover the cost of the expansion to assist our most vulnerable populations – primarily the disabled and elderly.
Senator Wayne D. Fontana
42nd Senatorial District