Revenue Shortfall Larger than Expected
On Monday, Governor Rendell announced that the state collected $390 million less in revenue in April then expected, leaving a $1.1 billion shortfall. This shortfall means the even greater need for revenue transfers, tax increases, major funding cuts, and/or the furlough and layoff of state employees.
Some are projecting an overall budget shortfall of $1.3 billion by the end of the fiscal year on June 30. The Governor’s proposed budget and the one that passed the House factored in a revenue shortfall of $525 million. Since the projected shortfall is now greater, some legislators are asking the Governor to submit a new budget proposal.
Yesterday, the Governor convened a special session of the legislature to work on closing the $470 million gap left in the transportation budget when the state’s proposal to toll I-80 was denied. This gap includes $300 million expected for roads and bridges and $170 million for mass transit agencies, including about $110 million for SEPTA.
The Governor urged the legislature to find at least $500 million a year to replace the anticipated money from tolling I-80. He also asked the legislature to try to be more ambitious and raise $3.5 billion a year in order to pay for more transportation needs. Pennsylvania leads the nation in the number of structurally deficient bridges and has more than 7,000 miles of state roads in poor condition.
Suggested proposals to raise the funds include an increase in the state’s gas tax, an increase in the oil company franchise tax, or increased motor vehicle related fees.
While the Governor would like legislators to commit to a way to raise funds for the transportation budget, Senators have expressed that they plan is to finish the General Fund budget before addressing transportation funding. Members from the House and Senate said they will use the special session as a opportunity to discuss the issue, but there was not a specific commitment to resolving the problem this year.
City Council and the Mayor are still far from a consensus on the city’s budget. Parties still disagree over the implementation of taxes and how deep cuts to spending should be. A gap of $120 million is supposed to be closed by the May 30 deadline for passing a budget.
While the Mayor claims he has support for his proposed tax on sugary drinks based on a recent survey, City Council members are reluctant to enact it. The other proposal on the table is for City Council to impose a property tax increase. A bill that would have raised the property tax by 12 percent was withdrawn and replaced with one that would increase the tax by 9 percent.
If no new revenue streams are enacted, the budgetary gap would need to be closed through major cuts. The Mayor did include $33 million in budget cuts in his proposal and services have already suffered cuts in funding that add up to $187 million over the last two years.
If you have questions about the budgetary process in Philadelphia, the Committee of Seventy had put together a series of questions and answers.
Did You Know...
That since the recession began in 2008, Philadelphia has undergone three rounds of budget cuts that eliminated 1,250 city positions, shuttered prevention programs, cut library hours and services, closed pools, delayed necessary repairs to recreation centers, police stations, streets and other infrastructure?
If you think that cuts have gone far enough, please sign a petition that will urge the Mayor and City Counsel to balance recent cuts to services with revenue increases that protect those who can least afford to pay.
Join the Wake-Up Call
Join the Southeastern Pennsylvania Budget Coalition for their two-part kickoff event. They will be giving out coffee as a wake up to constituents that we need to avoid balancing the state budget through cuts alone.
WHEN: Wednesday, May 12th, 7:30-8:30 am
WHERE: Media Train Station, 301 Media Station Road, Rose Valley (at South Orange Street)
The Coalition then invites you to take the train to Philadelphia Suburban Station or meet them there for a press event.
WHEN: Wednesday, May 12th at 10 A.M.
WHERE: Suburban Station Entrance, 16th and JFK Blvd., Philadelphia
RSVP for the main event at Philadelphia Suburban Station, or to find out about a satellite event near you, contact SEPA Budget Coalition Coordinator Kate Atkins at (215) 563-5848 x16 or email@example.com.
The Southeastern Pennsylvania Budget Coalition represents over 100 organizations calling for a balanced approach to the budget that includes revenue enhancements to prevent cuts to essential services. http://pabudgetnow.wordpress.com
Other Important Programs and Action Steps:
While the state budget is very tight this year, it is crucial for legislators to hear from their constituents about programs that cannot and should not see more cuts this year. Even programs that are not undergoing large cuts need to be advocated for to ensure that changes are not made to their funding during the budget debates. Below we have highlighted just a few of those programs:
Industry Partnerships: Workers who participate in the Industry Partnership program have seen an average 6.62% increase in their wages within the first year after training.
HB 2230, currently in the House Committee on Labor Relations, will institutionalize Industry Partnerships to ensure that this important program remains in Pennsylvania for years to come. If you or your clients have benefited from Industry Partnerships, please let your legislators know by emailing or calling their offices.
Adult Education and Family Literacy Programs: The greatest predictor of a child's future academic success is the literacy level of the child's mother. Adult education and family literacy programs are especially important during this recession to ensure that families have the opportunity to gain the education they need to become self-sufficient. If you or your clients have been impacted by the need for literacy, please contact your state legislators today and let them know.
State Supplemental Program: Help restore cuts to the State Supplemental Payments for Pennsylvania’s elderly, disabled, and blind. As a result of the 2009-2010 budget, the state supplement has now been cut each month by $5 for a single person and $10 for a couple. If you believe the payments are important. please contact your state legislators and urge them to find ways to restore this cut.
adultBasic: Over 350,000 people are on the waiting list for adultBasic. While on the waiting list people can pay full price for the program until they can access the program, but the cost to buy in has increased 80 percent. Meanwhile, coverage under the Governor’s 2010-2011 budget will not expand beyond 50,000 people. The funding also will not matter if the program expires at the end of this year. If you or your clients believe that when 12 percent of adults in Pennsylvania are without health care, programs that assist them are essential and need to be expanded, please contact your state legislators today and let them know.
Child Care Subsidy: At least 6,000 families are on the waiting list to receive the child care subsidy. The subsidy allows parents to afford to work by assisting them with the expense of child care. If you or your clients have been impacted by the need for child care, please contact your state legislators today and let them know.