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Budget Follow-Up: Rendell Administration Confirms Some Budgets Cut To 1994-95 Levels
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The Rendell Administration distributed a document this week during the budget bill signing ceremonies pointing out General Fund appropriations have been significantly reduced in some cases to levels of 17 years ago. The Department of Environmental Protection had its General Fund budget reduced the most to less than 1994-95 levels. The only reason no one could compare it to amounts further in the past was the agency was only formed in 1995. Click here to view the "Historical Analysis."
Unkindest Cuts
Gov. Rendell said he had to trim $1 billion from the proposed budget that he presented five months ago. In spite of these cuts, the budget absorbs cost increases mandated by law, over which the state has no control, which total more than $650 million for line items that fund Medical Assistance for the poor, prisons, debt service and school employees' Social Security.
To offset those rising and unavoidable costs, most other agencies of state government had to absorb deep cuts, as budget negotiators fought to contain spending while still covering state government's core functions. Since the national economic downturn began in the fall of 2008, Gov. Rendell and the General Assembly have eliminated $3 billion in annual spending. These cuts have touched almost every area of programs and services that the state provides to its citizens.
As just one example, the budget for the Governor's Office itself was cut by another 7.5 percent below last year's reduced sum, bringing it to approximately the funding level of 1996-97.
State government's overall administrative operating costs in the 2010-11 budget are 14 percent lower than in 2002-03, the year Gov. Rendell took office.
Natural Gas Production Tax
While the budget does not raise taxes, the General Assembly and the Governor agreed to enact by October 1 a new levy on the extraction of natural gas. It would take effect by January 1, 2011. Details, including rates and structure, will be worked out over the summer.
Revenue that the new natural gas tax produces over the final six months of the fiscal year is not counted in the new budget, but will help guard against a continued weak economy and several looming financial challenges with which the state must cope in the next few years.
In comments to the press this week, Gov. Rendell said the next tax must balance encouraging the natural gas drilling industry and protecting local communities and the environment, although he made no statements about where he would favor using the severance tax revenue to fund environmental program severely cut in the FY 2010-11 budget or to restore the Growing Greener Program which effectively ran out of money this year.
Marcelles Shale Coalition president Kathryn Klaber said the severance tax should not be looked at in a vacuum suggesting the industry would be looking for more concessions from the state in dealing with issues like "pooling," the forced-consolidation of mineral rights from non-consenting property owners in order to promote more effective development of the gas resource, "clarifying" the oversight responsibilities of state and local governments and "smoothing" overlaps between coal and gas producers.
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7/12/2010 |
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