Pa. budget boosts several key areas

Funding increases seen in education, public safety and social services

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HARRISBURG -- In the days leading up to the state budget deadline, talk at the Capitol was dominated not by line items but by separate legislation on transportation funding and liquor privatization.

From Gov. Tom Corbett's February proposal to the negotiated budget unveiled Saturday night, the governor and the Republicans controlling both legislative chambers never demanded dramatically different spending levels. The budget Mr. Corbett signed into law Sunday will spend $28.375 billion, an increase of 2.3 percent from last fiscal year.

Democrats protested that the plan spends too little on education, while Republicans applauded a number of funding increases. Here is a look at some of the budget highlights:

Social services

Last year, all 67 Pennsylvania counties took a 10 percent cut in human services funding, impacting mental health services, intellectual disability programs, drug and alcohol treatment, county child welfare special grants and homelessness services. The budget for the fiscal year that began Monday does not restore this approximately $84 million cut to county human service agencies.

Additionally, a budget-related bill known as the public welfare code -- which was approved Sunday by the Senate but must be approved again today after the House made changes to the language Monday -- would expand from 20 to 30 counties a pilot block grant program that aims to give counties more flexibility in how they spend those funds. The governor had originally wanted the program to expand to every county that wanted to participate.

This bill also would mandate an independent study of how the block grants are implemented. Some advocacy organizations say they fear it will lead to various needy groups being pitted against each other.

Before signing the budget late Sunday, Mr. Corbett touted his commitment to reducing the waiting list for services for people with intellectual disabilities. An additional $20 million to assist Pennsylvanians with autism and intellectual disabilities as they transition into adulthood and the workforce is included in this budget, according to Mr. Corbett's office. Another $20 million will be directed to home- and community-based programs for people with physical disabilities.

While not directly part of the budget bill, one big question mark still surrounding the process concerns the potential expansion of Medicaid, the program that provides health care coverage to low-income people. The Senate on Sunday night passed a welfare code bill -- one of a package of necessary budget-related bills -- that contained language that would commit the state to expand its Medicaid program. That provision subsequently was stripped out by the House on Monday; the bill returns to the Senate today and it's unclear what will happen. The governor has consistently said he can't agree to expand the program without the federal government allowing the state to make changes to its program.

Education

For K-12 education, basic education funding totaled $5.52 billion, a $122.5 million increase over last year.

State Rep. Joe Markosek, D-Monroeville, chairman of the House Appropriations Committee, noted that the budget did not include any significant increases for classroom programs and essentially maintained the nearly $1 billion in funds cut by the Corbett administration in 2011 when federal stimulus money disappeared.

Funding remains flat for special education, at a total of $1.02 billion, and for Accountability Block Grants, which received $100 million.

Some increased areas of funding include a $6 million increase in Safe Schools funding to a total of $8.5 million. Those funds can be used by school districts to increase and improve security in schools.

In addition to the basic education subsidy, the budget includes $10 million for the transitional loan fund for financially distressed school districts and $4.5 million for the Department of Education to provide technical assistance to districts on the financial recovery or financial watch lists.

Early education saw gains in funding with an extra $5 million for early intervention for a total of $221.9 million, an extra $4.5 million for Pre-K Counts for a total of $87.3 million and a $1.9 million increase in Head Start Supplemental Assistance for a total of $39.2 million.

Higher education received a modest increase of $6 million for a total allocation of $1.59 billion. The subsidy to the University of Pittsburgh is $136.3 million, which a university spokesman said is a slight increase from last year.

Taxes

One topic that stretched into the final days of negotiations was a set of business tax changes, included in legislation that has to return to the Senate after unrelated changes by the House.

The package includes a provision targeting the so-called Delaware loophole, through which companies can reduce their Pennsylvania taxes by paying royalties or similar expenses to affiliates in low-tax states. So long as the agreement becomes law, companies will be required to add to their taxable income any expenses incurred specifically to avoid taxes.

Business groups applauded a change that will allow companies to deduct more in prior operating losses from their taxable income. Most states do not cap net operating loss deductions.

But business lobbies said they were disappointed in an extension of the capital stock and franchise tax, which was scheduled to expire Jan. 1. The tax on business assets was extended two years, though at an increasingly reduced rate.

Public safety

Funds for the state police will increase by $15 million to $210 million, according to budget data from Senate Republicans.

Mr. Corbett said the increase allows for three new cadet classes in the new fiscal year, with a potential of 290 new troopers.

However, the statewide law enforcement agency has 545 vacancies and approximately 1,000 troopers eligible to retire, according to budget data from House Democrats, who say the increase is inadequate.

The budget also allocates an additional $3 million to the state Attorney General's Child Predator Interception Unit; that unit only was funded with about $1.3 million in the 2012-13 fiscal year.

Additionally, the budget for the state's Department of Corrections increases by about $75 million to $1.9 billion.

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Kate Giammarise: kgiammarise@post-gazette.com or 717-787-4254. Mary Niederberger: mniederberger@post-gazette.com or 412-263-1590. Karen Langley: klangley@post-gazette.com or 717-787-2141. Mary Niederberger reported from Pittsburgh.


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