Pensions, social services driving costs of proposed Pa. budget

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HARRISBURG — While the budget wrangling in the Capitol isn’t complete — Gov. Tom Corbett hasn’t indicated if he will sign the $29.1 billion spending plan the General Assembly sent him last week — here’s a look at some of the budget highlights as the plan is written:

Medicaid, social services

With Medicaid one of the biggest budget cost-drivers, the Department of Public Welfare gets a major chunk of Pennsylvania’s general fund money, about $11.2 billion, according to the administration, if the budget the Legislature approved last week ends up being the final budget.

The governor’s budget had called for 535 new caseworkers in county assistance offices; it’s unclear if they all will be hired, “based on the funding we received,” said Kait Gillis, a DPW spokeswoman.

The plan the General Assembly approved provides the same level of funding as last year for county-run human services such as certain mental health and drug and alcohol treatment programs, according to an analysis by the House Democratic Appropriations Committee. Critics argue this amounts to keeping a cut in place, as these programs were cut 10 percent statewide several years ago. The budget also maintains the Human Services Block Grant program limited to 30 counties; the program is intended to give counties more flexibility in how they can spend human services funds.

The budget includes some additional funds the governor advocated for, such as more money to reduce the waiting list for services for people with intellectual disabilities and an additional $1.4 million for domestic violence services statewide.

The budget also flat-funds the State Food Purchase Program at $17.4 million; food banks statewide had asked for increased funding for this due to rising food prices and nationwide cuts to the federal food stamp program in November.

“While we are grateful for no additional cuts, flat-funding is still essentially a cut given the increase in cost of the other variables involved such as the cost of food, fuel, storage, etc. and the increase in need we are experiencing,” said Kris Douglas, CEO of the Westmoreland County Food Bank and chairman of Feeding Pennsylvania.

Schools

The budget on the governor’s desk leaves the main K-12 education line flat-funded while adding $20 million for special education, $10 million for new school construction and $100 million for a block grant program to which Mr. Corbett had proposed adding $241 million.

State-related universities, such as the University of Pittsburgh, are flat-funded while community colleges receive a small increase.

A higher education scholarship program Mr. Corbett proposed would get $5 million, not his proposed $25 million.

Pensions

A source of rising cost in the budget is state payments into the State Employees’ Retirement System and Public School Employees’ Retirement System. The budget appropriates $1.16 billion in state payments for PSERS and a little more than $500 million to SERS, according to legislative staff. PSERS is also funded with a transfer of assets, which Republicans say is valued at $225 million, from tobacco settlement funds.

Democrats say the move is a problem because only part of the transfer is cash, and they believe budget writers overvalued the remaining investments.

“We’re very concerned about how the credit rating agencies are going to look at this,” said Miriam Fox, executive director for Democrats on the House Appropriations Committee.

The state corrections system would also receive a funding increase.

Legislators approved the budget the night of June 30, shortly before the beginning of the state’s new fiscal year July 1.

The governor has until Friday to sign or veto the budget before it automatically becomes law.


Kate Giammarise: kgiammarise, 717-787-4254 or on Twitter @KateGiammarise. Karen Langley: klangley@post-gazette.com, 717-787-2141 or on Twitter @karen_langley.

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