Ray's Round Up: Will June 2016 Usher in Another Contested State Budget Impasse?

It may seem that Pennsylvania just finalized a state budget, but when that budget is nine months late it means the deadline for the next budget comes quickly. Lawmakers will spend the next four weeks attempting to finalize a state budget for 2016-17. Whether the Governor and the General Assembly can arrive at a compromise plan to meet the June 30 deadline is anyone’s guess.

The issues that caused last year’s budget impasse haven’t changed much as we head into a new budget negotiation cycle. Governor Wolf cites a $2 billion structural budget deficit he feels must be addressed, as well as inadequate education funding.  He believes the only way to address these concerns are through additional revenues in the form of higher taxes.  The Republican leadership of the General Assembly views the situation differently.  They point out Pennsylvania is already funding education at the highest level in its history and that the structural deficit can be addressed by strategic budget reductions and other changes, specifically in the pension system for Commonwealth employees and by changing how Pennsylvania sells alcoholic beverages.

A group of Republican legislators who have formed a “Taxpayers Caucus” recently released a report detailing how Pennsylvania could realize budget savings without raising taxes. This report recommends specific ways the Commonwealth could reduce the overall state budget, ranging from reductions in spending by the Department of Human Services on items such as improper Medicaid payments and changes in pharmacy rebates to improved collection of delinquent taxes.  The reductions outlined in this report total over $3 billion which the authors believe would address the structural deficit cited by the Governor.

Governor Wolf and others have a different view of how the recommendations in this report would impact Pennsylvania and the state budget. The Pennsylvania Budget and Policy Center, which advocates for increased revenues to address the structural budget deficit, issued a statement in which they noted concerns with the proposals put forth by the Taxpayers Caucus, specifically that many of the savings noted in the report have already been accounted for in the proposed budget and therefore would not actually impact the structural deficit.  They also believe many of the other proposals are “one-time” savings that would reduce the deficit in 2016-17 but could increase the deficit in 2017-18 and in future years.

This ongoing budget dispute is once again making those who rely on state funding to provide services to Pennsylvanians nervous about whether there will be a disruption in those services if no budget agreement is reached. Area Agencies on Aging and others who assist older Pennsylvanians are particularly concerned, not wanting to see a repeat of last fall’s situation when numerous senior centers closed, home meal deliveries were reduced, and waiting lists for services across the Commonwealth more than doubled.

The tragic part of the potential reduction in these services is that there is no dispute about the source or level of their funding. All of these programs are funded by revenues from the Pennsylvania lottery, not from the General Fund Budget.  There is no major conflict about the level of funding for these services – last year the General Assembly accepted the Governor’s budget proposal without any significant change.

Advocates for older Pennsylvanians, including AARP, have been meeting with legislators and members of the Administration with a simple message for this year’s budget debate – please don’t let services for older Pennsylvanians get caught up in any budget impasse.  The budget for lottery-funded programs can easily be approved by General Assembly and agreed to by the Governor independently of the General Fund budget.  Funding for these programs is important to the safety and well-being of older Pennsylvanians.  No matter what side one takes in the overall budget debate, everyone can agree that we have a set amount of lottery dollars allocated to help older Pennsylvanians get the help they need to stay happy and healthy in their communities.  Those funds can and should be released beginning July 1 so older Pennsylvanians will not see any interruption in the services they rely upon.

“Ray’s Round Up” features updates on current state and federal issues by Ray Landis, AARP PA’s Advocacy Manager.