04/15/24 - 66 New Stories - REAL Environmental & Conservation Leadership In PA: http://tinyurl.com/msuwtctm
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Rendell, Legislators To Map Plan On $850 Million In Cuts Needed To State Budget
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Gov. Rendell, Senate and House legislative leaders will meet Monday to discuss options for dealing with what is now almost certain to be a $850 million hole in the state budget as a result of Congressional inaction on additional Medicaid funding for states. After he consults with legislative leaders, Gov. Rendell said he would announce his plan the week of August 9 detailing the specifics on what line items he would cut and the number of state worker he would furlough to make up for the lost funds.
While he remained optimistic about Congress appropriating the funds, the Governor this week expressed his first real doubts they would act in time. The Governor had imposed a deadline of the end of July to begin a serious look at options for dealing with the issue if Congress failed to act.
For Gov. Rendell the options include raising more state revenue by eliminating the Sales Tax discount companies receive for paying the tax on time, imposing additional taxes on cigars and smokeless tobacco products, using all of the proposed Marcellus Shale natural gas production tax (which legislative leaders promised to pass by October 1) and potentially laying off "thousands" of state employees.
With respect to state worker furloughs, Gov. Rendell said a decision on where the 700 planned worker layoffs are going to be made to balance this year's budget will not happen until the plan is in place to deal with the $850 million Medicaid funding loss.
Senate Republican Majority Leader Dominic Pileggi (R-Delaware) and Senate Minority Appropriations Committee Chair Jay Costa (D-Allegheny) have already said the first thing to go should be the Governor's extra $250 million in funding for basic education.
Other options discussed for raising state revenues include expanding small games of chance to local bars and taverns that could raise over $100 million. Sen. Pileggi discussed this and other issues facing the Senate in the fall session in a podcast released this week.
Since 2002-03, $1.3 billion in environmental funding has been diverted to help balance the state budget or pay for programs which could not get funding on their own.
During the last 8 years, DEP has lost nearly 20 percent of its staff and positions due to budget cuts, erasing 16 years of General Fund support for environmental programs, but the number of laws it has to enforce and its program responsibilities have not been reduced.
What About....
The $850 million in Medicaid funding is not the only budget challenge facing the Commonwealth at the moment. Here are a sampling of others--
-- $800 million in MCare funds might have to be returned as a result of a Commonwealth Court decision saying the transfers to balance the budget in FY 2009-10 were illegal (case under appeal);
-- $472 million shortfall in highway and transit funding when the federal government turned down the plan to toll I-80 (now the subject of a special legislative session);
-- $3 billion the state borrowed from the federal government to keep its Unemployment Compensation Fund afloat (funded by taxes on employers);
-- $5 billion structural deficit in the FY 2011-12 budget Sen. Pileggi says is waiting for the next Governor when federal stimulus funds go away and other cost increases come home to roost; and-- $2 billion increase in annual state worker and $4.2 billion in annual school employee pension costs by FY 2012-13 if steps are not taken to restructure benefits for new employees and cover pension obligations. The House did pass a school pension reform bill in June, but no other actions were taken. Republican candidate Tom Corbett this week reiterated his "no tax" increase pledge if he's elected Governor.
Corbett Reiterates No Tax Promise |
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8/2/2010 |
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