Pennsylvania Finally Passes Its Budget – A Recap
Three weeks ago when my column was safely put to bed for the September 21 edition, I received a telephone message at home from a Sunday staffer asking if I would like to make any revisions since it had been widely reported and Governor Rendell had, in fact, announced that a deal had been reached on the budget. My column complained that it was time to end discussion and get the budget passed since real people, including many in the social service network were being affected. Although, by the time I played the message the time for changes had passed, my natural skepticism would have come into play anyway. I never believe that anything is done until it is done.
Sure enough, the publicly announced budget deal fell through and we were treated to almost three more weeks without a State budget thereby awarding Pennsylvania the title of the last State in the country to pass its 2009-2010 budget. The budget was finally was signed into law by the Governor quietly 101 days late on October 9.
To briefly summarize, the budget as passed avoided two of the major challenges, that is, there is no broad based statewide increase in the sales tax and no increase in the personal income tax. As to the rest, there is a patchwork quilt of smaller, more targeted taxes such as increased taxes on cigarettes and taxes on small cigars along with a delay in phasing out the business Capital Stock and Franchise Tax. Approval of table games including poker and blackjack at casinos in USA will be tied to new taxes on them. Some State lands will be leased for natural gas production. On the other hand, the controversial proposed taxes on art and cultural events (but not on sports) failed to materialize and museum goers and ticket holders for plays were spared.
As for cuts, 142 line items were eliminated completely and 360 more were reduced. Not all services will survive. Community service providers have been struggling for three months without essential payment from the State for services rendered. Some of them borrowed and some laid off employees.
Business development took a major hit . The Department of Community and Economic Development that provides grants to attract new employers and fuel business growth was cut 53%. Labor and Industry lost all vocational rehabilitation, entrepreneurial assistance, and self-employment assistance funding.
State contribution to the Historical and Museum Commission was cut by more than 50 percent and the state subsidy for Public Television was eliminated.
Funding for the State Courts was reduced by 10 percent.
The budget proposed early this year would eliminate all State contribution to the cost of legal services for the poor except criminal defense. It is still too soon to tell whether any of that was restored.
Although the Department of Public Welfare budget was reduced by 1.7 percent, a substantial amount of the difference was picked up by federal stimulus money. In other words, if the feds had not stepped in with $1.7 billion from the stimulus package, the losses would have been dramatic. DPW is the source through which the State contribution to Medicaid nursing home care is funded.
The day before the budget was finally passed and signed into law, nonprofits demonstrated in Harrisburg. The theme could be summarized as “Never again.” In a press release issued by the Pennsylvania Association of Nonprofit Organizations, David Ross of PANO stated “Nonprofits have been devastated by this budget impasse…The passage of the budget may be imminent, but our work continues.”
Doug Hill, Executive Director of the County Commissioners Association of Pennsylvania noted “As the budget impasse drags on, only fractional amounts of cash from the July ‘bridge budget’ have been flowing from the state. This has forced layoffs and furloughs, program shut downs, and reductions in services as counties try to stretch scant local reserves and borrowed dollars to meet state obligations and the needs of local residents.”
If there was a winner, it probably was basic public education funding which increased by $300 million to $5.5 billion, although, considering that a third of the year has already passed, there are probably few celebrations even there.
Expanded Medicaid Estate Recovery, a subject I discussed in prior columns as the “worst law ever,” for seniors which would have allowed government liens on property of surviving spouses of Medicaid patients, did not pass. This success is a tribute to concerned citizens, many of them in Chester County, who wrote to their legislators and let their voices be heard. They did a great job which is a subject I will address in a later column.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.