PathWays PA Special Budget E-Alert - June 23, 2010

State Budget – 7 Days Until Budget Deadline

The Governor is scheduled to meet with legislative leaders today to discuss a budget with no new revenue sources, only program cuts. The Governor has agreed to review a “cuts-only” proposal and identify which cuts he accepts and those he does not.

A major issue facing legislators is what the final spend number will be, which is unfortunately difficult to determine when the parties do not know how much money will be available to spend next year. It is estimated that the state has $27.5 billion to spend but that depends on whether Congress extended the FMAP program.  Without passage of FMAP, there will be an additional gap of $850 million for Pennsylvania. (See our Action Alert on extending FMAP below.)

Good News for PA: The Tax Amnesty Program Surpassed its Goal

For almost two months, the state has been urging individuals who are delinquent on their taxes to pay what they owe without penalty and only half the interest due. The state hoped to raise $190 million though this program. Earlier this week, the Commonwealth announced that the goal was not only reached but also surpassed it by $71 million. Most of the money raised will go directly to pay off some of the $1.5 billion deficit.

While this program was a good start, the state is still owed an estimated $2 billion in back taxes. Efforts to collect back taxes will continue.

Action Alerts

Urge Your Members of Congress to Extend FMAP

In order to avoid an even larger hole in the budget, Pennsylvania needs help from the federal governments. During the recession, the federal government gave states additional money to pay for their Medicaid expenses through the Federal Medicaid Matching Assistance Program (FMAP). This additional money is set to expire at the end of this year. Without an extension, Pennsylvania will be facing an additional $850 million hole in the budget.

Without these funds, the Governor has said Pennsylvania will:
  • Cut supplemental payments to hospitals that care for Medicaid and uninsured people by $93 million
  • Cut county child welfare by 25% and cut MH/MR services for a total of $350 million
  • Cut all state funded substance abuse and homeless services and other services to poor families by $91 million
  • Cut Medicaid payments to doctors and other providers by $86 million
  • Cut home and community based waiver services by 10%

If you believe that Pennsylvania is truly in need of this additional funding, please contact your members of Congress today and urge them to include a 6-month extension for enhanced federal Medicaid match rate (FMAP) in the final version of HR 4213.

DPW Health Care Spending Drives Local Economies

The Department of Public Welfare (DPW) recently sent out a budget alert that shows the impact of funding for Medical Assistance (MA) on Pennsylvania’s economy. For each $1 dollar of public funds invested, an additional $1.77 in economic activity is generated. This “ripple” effect in the local economy is created through the wages funded and the purchase of goods and services at local businesses.

The combined federal-state investment of $15.8 billion in MA for fiscal year 2008-09 created a total economic impact of more than $44 billion in annual economic activity in Pennsylvania.

In 11 counties, MA is responsible for more than $1 billion dollars of economic activity. Those counties include: Allegheny, Berks, Bucks, Delaware, Erie, Lancaster, Lehigh, Luzerne, Montgomery, Philadelphia, Westmoreland.

MA is not the only DPW program that creates economic activity within the state. If you believe that legislators should take a balanced approach to the budget to ensure that DPW and other departments do not see severe cuts, please contact your legislators today.

Rally Against Budget Cuts

The Southeastern Pennsylvania Budget Coalition is holding a rally against budget cuts.

WHEN: Thursday July 1, Noon
WHERE: Philadelphia City Hall, Dilworth Plaza (15th Street Side)

The Vote for Homes! Coalition is marching to the rally. If you would like to join in the march, meet the Coalition at Broad Street and Fairmount Avenue at 11:00. For more information, contact Jennine Miller at 215-232-7272 or

To RSVP for the rally, contact Kate Atkins at (215) 563-5848 x 16 or

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:

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 those on the waiting list 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. 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: 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.


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