June 30, 2014

Senate, House Republicans Approve $29 Billion Budget

The Senate and House Republicans Monday approved, by party-line votes, a $29 billion General Fund budget with no tax increases, but which is based on $246.5 million in transfers from special funds, $95 million in additional “non-impact” natural gas leasing in State Parks and Forests and $75 million from a Philadelphia casino license that may or may not happen.
This compares to last year’s $28.5 billion budget and a $29.4 billion budget proposed by Gov. Corbett in February.
There has been no agreement on general pension reform, although pension reform for elected officials is making its way through the General Assembly.  It also does not include liquor privatization in any form.  Both pension reform and liquor privatization were  Gov. Corbett’s key priorities.
Here’s a thumbnail of the new budget--
-- Transfer $17.6 million Horse Racing Fund for Dept. of Agriculture operations
-- Community Colleges - $215,667,000, $3.5 million increase
-- Transfer to Community College Capital Fund - $48,869,000, no change
-- Regional Community College Capital Fund - $2.4 million
-- State Related Universities - Flat funding, except slight increase for PA College Of Technology
-- State System of Higher Education - Flat funding
-- PHEAA Scholarships - $5 million increase
Environmental Protection
-- DEP Operations - $12.4 million increase
-- Sewage Facilities Planning Grants - $500,000 increase
-- Delaware River Basin Commission - $500,000 cut
-- Alternative Fuels Incentive Grant Fund - $6.2 million
Conservation & Natural Resources
-- Heritage Parks Program - $2.75 million, up from $2.25 million last year
-- Transfer of $95 million from “non-impact drilling on DCNR Land
-- Transfer of $73 million from the Oil and Gas Fund for DCNR operations
-- Transfer of $20 million from State Forest Timber operations
-- NO transfer from Keystone Fund
Other Provisions
-- No transfer from the Underground Storage Tank Indemnification Fund
-- No suspension of tax credit programs like the farm conservation tax credit REAP or the Historic Preservation tax credit
Attorney General - $5 million increase
State Treasurer - $3.8 million increase
Auditor General - Flat funding
Judiciary - Flat funding
House - $1.9 million increase
Senate - $950,000 increase
Click Here for a copy of the line item spreadsheet.  Click Here for the budget balance and transfers sheet.
Political Reaction
Sen. Vincent Hughes (D-Philadelphia), Minority Chair of the Senate Appropriations Committee, said, “Today, in an effort to pass a budget bill before the start of the new fiscal year, Senate Republicans advanced a $29.1 billion spending plan to the House of Representatives. This budget bill, which will make it to Gov. Corbett’s desk for his approval tonight, is both a sham and a farce; a obvious attempt at a spending plan which creates no sustainable revenues, and fails to appropriately fund schools, job creation, and human services. This is flim-flam sham budget does nothing but move Pennsylvania backwards.
“The misguided spending plan is balanced using more than $2.5 billion in budget gimmicks, bloated revenue estimates, and one-time fund transfers. Rather than explore options for sustainable revenues such as a Marcellus Shale severance tax or Medicaid expansion, Gov. Corbett and Pennsylvania Republicans have instead decided to implement budget tricks that will leave the Commonwealth with a structural deficit for 2015, and beyond. These revenue pillars are so shaky, that the General Assembly may be forced to return to make significant repairs to the spending plan early next year. Frankly, this budget is not worth the paper it will be printed on.
“Senate Republicans will praise the $300 million added to education in their spending plan, without mentioning that these funds are only a small step to restore the $1 billion cuts in education spending authored by the Governor throughout his tenure. As a result of this shortfall, local property taxes are likely to again increase throughout the state. Once again, because of Gov. Corbett’s inability to take responsibility for poor budget decisions, local property taxpayers and school students will be forced to shoulder the burden of this spending plan.
“After reviewing the budget passed by Senate Republicans today, it is clear to me that their only goal was to finish the budget on-time; without any concern about getting it right for the people of Pennsylvania. The passage of this spending plan is simply a failure, as it will only perpetuate the budget problems facing the Commonwealth, throughout the next fiscal year.”
House Minority Leader Frank Dermody (D-Allegheny) said, “We are supposed to be voting on a 12-month budget for the commonwealth of Pennsylvania. What the Republicans are putting before us is a spending plan based on false assumptions that will likely lead to many state programs running out of cash months ahead of time.
“This budget locks in deep budget cuts to education, health care, human services and many other programs made by Republicans in the last three budgets. It demonstrates the failure of their approach to governing. Most other states had budget surpluses this year, but in Pennsylvania we are dealing with insufficient revenue for yet another year.
“The last three budgets got us to this point. This flawed budget will take us even further in the wrong direction. It’s a budget that sets Pennsylvania up for failure.
“Budget votes have consequences and the people of Pennsylvania are in for a lot of unnecessary suffering because of the vote taken tonight to pass this unworkable Republican budget.
“Well before the next governor’s budget plan is presented to the General Assembly, we will be scrambling to plug the leaks created by this one.”
Rep. Joe Markosek (D-Allegheny), Minority Chair of the House Appropriations Committee said, "This budget is irresponsible and dangerously shortsighted. It relies on more than $1.7 billion in unsustainable revenue sources and one-time budget gimmicks that will result in a structural deficit that will dwarf the current budget hole.
"In addition, Gov. Corbett and the majority party are turning a blind eye to the needs of most Pennsylvanians, choosing to prioritize business tax breaks over funding for our schools. This budget contains more than $880 million in business tax cuts, bringing the total to $2.1 billion over Corbett’s tenure.
"However, those tax breaks have not helped. Pennsylvania has the dubious distinction of being one of only 11 states to face a revenue shortfall this year while we continue to linger near the bottom of the list for job growth.
"Meanwhile, the majority party continues to shortchange our future – the students of Pennsylvania. During this governor's tenure, our schools were forced to increase class sizes, reduce course offerings, cut more than 20,000 teachers and other education jobs, and increase local property taxes. Higher education has become unaffordable, and our college graduates carry the third-highest debt load in the country."
"During Gov. Corbett's first budget address in 2010, he proclaimed that 'The day of reckoning has come.' However, it appears to me that he's now interested in delaying the day of reckoning for his own failed policies."
Sen. McIlhinney Lone Republican Voting Against Budget