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PathWays PA Special Budget Alert - October 21, 2009

We are continuing this budget alert for the time being to keep readers updated on the ongoing debate on the table games legislation, which affects the final budget, as well as information on the disbursement of public funds.

PathWays PA would especially like to thank all of our readers for their support and feedback on our alerts. We are particularly grateful for everyone’s efforts to urge legislators to pass a fair, responsible budget.

In an effort to improve future alerts, we have created a brief survey. Please take a few minutes and let us know what you thought of our Budget Alerts and how we may be able to improve them. Also, please stay turned, as next year’s budget is already right around the corner.

Budget Payments

Now that we finally have a state budget, many service providers, school, organizations, and others are wondering when they will start to receive payments for services provided during the impasse (and for some, services provided since April).

Earlier this week Governor Ed Rendell held a press conference with State Treasurer Rob McCord and Secretary of Budget Mary Soderberg to announce that $3 billion in delayed payments have been made to education and social service programs. Payments were first made to high-priority items such as basic education, special education, child care services, child welfare, the Children's Health Insurance Program, Pre-Kindergarten Counts and Head Start.

While funding has gone directly to some, the delay for funding continues for many service providers who receive funding from third party entities.

More Work to Be Done: Legalization of Table Games

On Monday, legislators continued talks on the legalization of table games at Pennsylvania's slot machine casinos.

There appears to be agreement on a license fee of $15 million from each slot-machine casino wanting to operate table games. The disagreement is over the state’s tax rate on casino revenue from table games. Proposals range from a tax of 14 percent to 34 percent, and legislators are unsure if a potion of the tax revenues will be set aside for the counties and municipalities that host the casinos. Governor Rendell said he would veto any bill on table games that would not produce at least $200 million this year.

Until a table games bill is passed, $730 million in discretionary funding for universities and other institutions will not be released.

Long Term Impact of the Budget Impasse

For those considered “non-preferred,” the budget impasse is far from over.
  • Penn State is suffering the largest budget hole, waiting on roughly $334 million from the state, or 9 percent of its budget.
  • Temple University is supposed to receive about $173 million
  • The University of Pittsburgh is waiting to receive about $168 million
  • Lincoln University is waiting on $14 million.
  • Another $34.5 million is set aside for the University of Pennsylvania. Much of that money is for the university's School of Veterinary Medicine, a key link in Pennsylvania's agriculture and food safety network.

Since the 101-day impasse:

The state rushed payments to schools and some agencies; but many need time to recover from the three-month stalemate and move forward after laying off workers, cutting programs, and taking out loans.

The Children's Palace Day Care in Susquehanna County has received their state money, but that funding will not help with the hundreds they owe in interest on loans. The center’s attendance is also down by 19 children because state programs were put on hold and the owner is unsure whether those children will return.

Many providers are calling on the state to pay for interest accrued on loans they had to take out to stay open during the impasse. Governor Rendell and legislators have said they would consider a proposal that called for that payment, however, the likelihood of such a bill being passed depends on the state’s ability to afford it.


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