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PathWays PA Special Budget Alert - August 5, 2009

It is day 36 of the current fiscal year and today the Governor signed a “stop-gap” budget, which only funds a small fraction of the Commonwealth’s expenses.

While state workers will begin receiving paychecks and some essential services will receive funds, many institutions and organizations that rely on state funding will have to go without until the remainder of the budget is passed. These include schools, hospitals, and non-profit organizations that may have to make tough decisions that could lead to laying-off workers, cutting services, or having to close their doors because their funding is tied up until the budget is passed.

As budget proposals will continue to be negotiated, important programs are still at risk of being cut. It is crucial for legislators to continue to hear from their constituents about what programs Pennsylvania cannot afford to cut.

If you are upset about the budget proposals, which include cuts ranging from education to hospitals to the elimination of the Industry Partnership program, please tell your legislators how you would finish this sentence: “If the choice is between reducing/eliminating spending on hospitals, burn units, Industry Partnerships, and childcare, or increasing revenues, I would support…”

During this recession, some budget cuts are inevitable. But, too many cuts will lead to long-term impacts on our families, our health, and our economy at a time when we can’t afford to do without.

For more information throughout the week on the budget and other issues, be sure to check out the PathWays PA Policy Blog.

Budget Update

Yesterday, the House passed legislation approving the $27.3 billion Senate spending plan. This legislation is being used as a mechanism to pay state workers and fund services essential to public protection. The Governor used his line-item veto authority to delete many of the 700 budget lines, leaving $11 billion worth of services in the legislation.

Some programs that will begin to receive some funding are County Assistance Offices, child support enforcement, youth development institutions, yet there will no funding for child care, child welfare, rape crisis, domestic violence, homeless services, autism, and Nurse Family Partnership, to name a few, until the final budget – if those services are included in the final budget.

At the signing, the Governor urged the Conference Committee to continue to work towards the final, full budget.

The Local Effect of Budget Proposals

While the “stop-gap” budget will allow state workers and some services to be paid, many other departments, organizations, and agencies will still be without any funding. Below are some local examples of how the delay and some of the budget proposals truly impact different parts of the state.

Pennsylvania's Department of Education
announced that it would not give the state's 500 districts their first scheduled subsidy payment of more than $416 million for the 2009-10 year. The subsidy payments include funding for basic and special education, charter school reimbursement, pupil transportation and the accountability block grant. Districts rely on the monthly payments in determining their annual budgets, as well as payment schedules to district vendors. No school district, not even the most cash-strapped, will receive money. Poorer districts that depend more on state revenue and have fewer cash reserves are likely to feel the loss of the first subsidy payment the most.
  • In Philadelphia, state money accounts for 55 percent of the district's budget. The district had to borrowed $400 million to meet its short-term needs. For now, the district can cover expenses with the amount borrowed; however, if they do not receive the next payment from the state the district will not be able to make future payments.
  • The Chester Upland School District receives about 75 percent of its revenue from the state. Failure to receive state funds will put salaries and payments to vendors in serious jeopardy.

The Department of Military Affairs stopped admitting veterans who need assistance with daily tasks to their six state run facilities. It is estimated that the Department would have to eliminate 140 jobs, 400 beds, and potentially close one of the facilities. Some budget proposals would cut $7.6 million from veterans homes funding and cause the state to lose $5.9 million in matching federal funds.

The Maynard Street and Messiah Senior Community Centers in Williamsport are temporarily closed because they are not receiving funds. The Centers will also have to lay off 5 or 6 employees, hopefully only temporarily.

On Monday, the Armstrong County Community Action Agency had to hand out layoff notices to 30 of its 70 staffers. For now, the agency is not planning to cut services but it will be slower at handling them. The agency is one of the largest providers of human services in Armstrong County, assisting individuals with issues such as nutrition, housing, transportation, education, job training, job placement, disaster assistance and self-sufficiency and oversees programs such as Head Start and the local food bank.

CHIP – Cover All Kids

Take Action! During the past three years, CHIP has provided comprehensive health insurance coverage for thousands of children throughout Pennsylvania who would not have been eligible without the Cover All Kids program.
  • However, current budget proposals rescind this CHIP provision, which could result in up to 12,000 kids being cut from the program.
  • Even during an economic crisis, it is important to pay attention to the long-term effects of short-term cuts.
  • A recent report from Rice University puts the cost of health insurance through age 18 at $7,451, while the benefits equate to as much at $15,000.

Industry Partnerships

Take Action! Industry Partnerships are consortiums that allow employers to improve and expand their workforce by bringing together companies committed to the development of their workforce.
  • This program provides workers with access to training that gives them the skills necessary to maintain jobs and obtain employment with sufficient wages so workers can adequately support their families.
  • In Pennsylvania, more than 6,300 businesses are involved with more than 70 Industry Partnerships across the state. More than 70,000 workers have been trained since 2005.
  • On average, those workers have seen their wages rise by 6.62 percent within the first year after receiving the training.
  • Read more about how the Industry Partnership program is helping in one county
  • Talking points are available from Workforce PA, as is a sample letter to send to legislators (please email with any legislators you contact as well).

Child Care Work Subsidies

Take Action
! The Child Care Works Subsidies allow parents to afford to work by assisting them with the expense of child care.
  • For many parents the cost of child care may be more than they bring home in a paycheck.
  • Currently in Pennsylvania, over 16,000 are eligible for the child care subsidies but are currently on the waitlist, where some families remain for months.
  • In the meantime, they must pay more than they can afford for child care, provide childcare through an unreliable patchwork of friends, family, or substandard facilities, or risk losing their jobs at a time when employment is hard to find.
  • For more information please see a new report from PCCY, “Child Care Works, A Program with a Growing Need

Adult Education and Family Literacy

Take Action
! Adult education and family literacy are especially important during this recession to ensure that families have the opportunity to gain the education they need to be or become self-sufficient. In Pennsylvania, the Senate proposal cuts adult literacy by 29% and the House is considering a 12% cut. Please contact your representatives today to let them know the importance of this program!


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