State Budget Update - July 1, 2010
IF YOU READ NOTHING ELSE IN THIS UPDATE – READ THIS! Now that we are past this year’s budget (see the update below), our work is just beginning. We have a new Governor coming in January, and legislators are pushing pension reform legislation that will NOT be great for public employees. Work on the next state budget will have to begin almost immediately (although much of it will occur behind the scenes until after the November election). Last, but certainly not least, we will be negotiating our next state contract with a new governor.
This is why we began our Human Services Campaign in January 2009. We knew that the first two budgets in our initial three-year plan would be very difficult – and that has been true. When we began our HSC, we also anticipated that next year’s budget would be even MORE difficult – and that seems to be coming true as well. So we must continue moving forward with our Human Services Campaign – it is even more important now!
Phase 3 of the Human Services Campaign will be critical in determining the future of this union and our members!
We will kick off Phase 3 of the HSC at the Leadership Training in September. If you are not registered for the September Leadership Training yet, please register right away – the deadline is August 2. (Click here to download a registration form.) Without a concerted effort, there will be more pain to come.
We MUST get organized, mobilized and ready for this fight!
BUDGET UPDATE
The General Assembly has passed a $28.05 billion budget for 2010-11. The Governor is expected to sign it sometime in the next day or two.
Under this new budget, spending would increase by $182 million, which is less than a 1% increase from the current budget. The new total budget figure is $1 billion less than the Governor had proposed and $500 more than the Senate Republicans wanted.
This happened very quickly – in fact, so quickly that legislators had to suspend the rules they had put in place as part of a legislative reform package. These reforms were intended to allow legislators ample time to review something as important as a budget. The agreement was announced on Tuesday afternoon and passed last evening.
This new budget could result in as many as 600 to 1,000 furloughs or layoffs! At this time, we do not have any specific information about how many furloughs or layoffs might occur or where they might occur. We have not received any notifications. We will post information on this website as soon as we hear anything, so you should check back here on a regular basis for further details.
Legislative Director Bill Bacon has been reviewing the line-by-line items since Tuesday afternoon. Here are some of the changes from the current year:
· As in previous budgets, the General Government Operations (GGO) lines in almost every agency have been reduced, with two notable exceptions – the GGO line in DPW has been increased by over $2.1 million and in Probation and Parole by almost $3.7 million!
· There are a few other good things in the budget:
o CAO funding is increased by $9 million.
o UC is increased.
o Disability and determination line in OVR will be increased by $22 million.
· Of course, there are a lot more bad things in the deal:
o Human Services Development Funding will be cut by $5.8 million, which is the 8th year in a row that HSDF has been cut.
o Drug & alcohol treatment funds are either flat-lined or cut in every agency, including a $2.5 million cut in the Department of Health.
o County child welfare funds are cut by $19 million.
o CAO/Medical Assistance will be cut by $2.8 million.
o County mental health funds are cut by $33.8 million.
o Grants to aged, blind and disability will be cut by $5.8 million.
o Behavioral services will be cut by $2.1 million.
The budget anticipates some revenue from a new severance tax on natural gas production that is to be in place by January 2011. However, the details will not even be discussed until this fall.
We are very disappointed, as are our colleagues in The Clear Coalition, that legislators did NOT take this opportunity to close the Delaware tax loophole that allows many big corporations to avoid paying their fair share of taxes in Pennsylvania.
As they did last year, the legislative leaders are, once again, relying on one-time funding sources to close this year’s budget gap and refusing to consider new recurring revenue sources, such as taxes on cigars and smokeless tobacco, which would help close future funding gaps. As a result of this lack of foresight, this budget will again put critical services like health care and other human services in jeopardy.
Among those one-time funding sources being used to balance this year’s budget is the $850 million in extended FMAP funds that have NOT yet been approved by Congress. In fact, we are hearing that, if the federal funding DOES pass, it will be less than what this budget deal projects.
If this FMAP funding does not pass, or if, as we expect, the amount approved by Congress is less than $850 million, there will be SEVERE cuts. And these cuts will not only occur in the public sector, but there will also be loss of jobs in counties and the nonprofit sector.
The Governor has said that if the FMAP money is not forthcoming, the state layoffs needed to offset that deficit would be devastating – the number could be as high as 20,000! This issue will be ongoing until a decision is made by the federal government.
TAKE ACTION: Click here to send emails to your members of Congress, demanding that they pass the FMAP Extension TODAY!
Again, continue to check back on our website for further details. We will post information as soon as we have it.
PENSION REFORM
As to the pension bill, Bill Bacon met with Senator Pileggi Tuesday on HB 2497. Pileggi said that the Senate is NOT expected to act on pension reform before September and that the window for getting pension reform done will be between September 2010 and June 2011. He said his caucus has several concerns about the legislation as passed by the House and said they will approach all parties about some of their ideas. We will keep you apprised of any new developments.