Day of Reckoning: Day of Reckoning: The 2011-12 BudgetThe 2011-12 Budget

SEPA CoalitionMarch 21, 2011

44 States Anticipating 44 States Anticipating Shortfalls Going Into FY 11-Shortfalls Going Into FY 11-

1212

Over $3 Billion in Temporary Over $3 Billion in Temporary Federal Funding Goes Away in Federal Funding Goes Away in 2011-122011-12

As Recession Ends, Tax As Recession Ends, Tax Collections Beginning to Grow Collections Beginning to Grow Again Again

Current Year Surplus Current Year Surplus ExpectedExpected

Still Below Pre-Recession Still Below Pre-Recession LevelsLevels

OVERVIEWOVERVIEW

2010-11 2011-12 Change from Percent

Available Gov. Budget 2010-11 Available Change25,142,560$ 27,331,219$ 2,188,659$ 8.7%

3,054,992$ -$ (3,054,992)$ -100.0%28,197,552$ 27,331,219$ (866,333)$ -3.1%

Proposed General Fund 2011-12

Total Spending: 2011-12 Total Spending: 2011-12 ProposedProposed

85% of Budget is Education, 85% of Budget is Education, Health, Public SafetyHealth, Public Safety

Spending Drops to 2008 Spending Drops to 2008 LevelsLevels

Budget ThemesBudget Themes“Day of Reckoning” is here

◦Living within our means◦No taxes, fees or revenue of any kind◦Spending reductions with mandate

reliefLimited environmental oversight

“friction free”Shared sacrificePrivate school vouchers

What’s missing?What’s missing?

SALE OF LIQUOR STORES MARCELLUS SHALE TAX

Budget Resumes Business Budget Resumes Business Tax CutsTax CutsBusiness Bonus Depreciation Tax Cut

($200 - $400 M in 2011-12)Research & Development Tax Credit

UpCapital Stock and Franchise Tax

Phase-Out Resumes in 2012Film and Job Creation Tax Credits

DownTemporary Cut to Other Tax Credits

Ends

A Tale of PrioritiesA Tale of Priorities

Education: -11%

Higher ed: -52%

DCED: -31%

Corrections: +11%

Parole: +6.3%

State police: +5.7%

EducationEducation$1.1 billion cut from

basic education◦ $550 million (10%)

basic ed line◦ $259 million

Accountability Block Grant

◦ $47.6 million EAP tutoring program

◦ $224 million charter school subsidy

Special Education: ◦ $1.0 billion, 3rd year

Early intervention◦ Up 9% to $198 mill

Early ChildhoodEarly Childhood

Budgetary Reserve level

Pre-K CountsHead StartABG eliminated

Pre-k classrooms17,000 children in full day kindergarten in Philadelphia

Education Cuts in Education Cuts in PhiladelphiaPhiladelphiaBasic ed formula: $104

millionABG: $ 56 millionEAP: $ 18.7 millionCharter school: $112.5 millionSIG: $ 5.9 millionTOTAL $ 297.2 million

Libraries and LiteracyLibraries and LiteracyState Library

◦ 54% reduction since 2008-09

Public Library subsidy◦ Held harmless◦ Down 30% overall

Adult Literacy◦ Down $2.5 million◦ 46% cut since 2008-

09

Higher EducationHigher Education

Program Amount Change

State system

$232.6 million -50%

Penn State $165.1 million -51%

Community colleges

$212.2 million -10%

Pitt, Temple, Lincoln

$169.5 million -52%

PHEAA $411.6 million -6.7%

Community Economic Community Economic DevelopmentDevelopment$224 million total

◦Down $104 million◦Down 64% from pre-recession levels

Cuts Housing/Redevelopment Assistance

Eliminated HEMAPCombined WAM programsEliminates industry specific

programs

Human Services not Human Services not SparedSparedHuman Services Development Fund:

$23 million eliminatedBHSI: Down $1.01 million (split)County Child Welfare: 2% reduction

◦3% reduction Title IV-E out of home placement

Homeless and rental assistance: level funded

Hospitals: $330 million State and Federal cut

Haircuts

Continued reductions in Continued reductions in servicesservicesMental health and intellectual

disabilities◦Mental health services state increase

but expiring ARRA causes small reduction

Behavioral health services: down 2%

No funding for waiting listsAutism services federal funds cut

DPW COST SAVINGSDPW COST SAVINGS

INITIATIVE SAVINGS

Deinstitutionalization of services and rebalancing of long-term living

$ 40.5 million

More effective care management

$ 55.9 million

Smart purchasing $165.5 million

Program integrity* $ 46.6 million

Fair Share payment $ 56.1 million

TOTAL $364.6 million

Welfare and Cash Welfare and Cash AssistanceAssistanceWork First Orientation

◦ New Directions: -50%◦ County Assistance:-$15

million redirect E&T◦ Cash Grants: -$26

million for Employment & Training

Supplemental payments:◦ Essentially flat funded

Shift of Tobacco Settlement Shift of Tobacco Settlement FundsFundsPublic Welfare

◦MAWD◦Long-term care◦Home/

Community Services

Health Department◦$74 million◦Total increase:

$61.5 million

$130 million from Tobacco Settlement Fund diverted to the

Liberty Loan Fund

Assessing the BudgetAssessing the Budget

FEAR

RELIEF

REALITY

Timetable: May 31 voteTimetable: May 31 vote

The Legislatures ResponseThe Legislatures ResponseSenator Scarnati:

Marcellus impact fee

Governor Corbett: $27.3 billion spend

Senator Corman: Higher ed. cuts too deep

House Republicans: welfare budget too high

No money for General fund

Spending limit even if revenue up?

Where does the money come from

Look for cuts here

AlternativesAlternatives

The ChoicesThe ChoicesMarcellus Shale:

$200 mOther tobacco: $42 mBonus deprec.

$235mCSFT: $90 mDelaware loophole:

$600Recapture Bush tax

cut: $330 million

Penn State, CC

HSDF, Literacy

State systemPitt and

LincolnBasic ed, LTCABG, Temple

What you can doWhat you can do

Join SEPA Coalition

Get info from Better Choiceswww.betterchoicesforpa.com

Get Active!May 3rd Rally at the Capitolwww.clearforpa.org for bus

information