Early budget deal may be a milestone for deficits, school aid
HARRISBURG – Democratic Gov. Tom Wolf and the Republican-controlled Legislature have wrapped up budget legislation a week before Pennsylvania state government’s new fiscal year starts, an about-face after three years of protracted partisan fights over spending. Besides that, the budget perhaps achieves milestones in overcoming deficits and cuts to education aid, while lawmakers were animated by the Florida high school shooting in February.
THE BOTTOM LINE
The $32.7 billion plan holds the line on state taxes and increases authorized spending by about $700 million through the state’s main bank account, or 2 percent above the current year’s enacted budget of $32 billion.
The spending increase goes primarily to public schools, prisons, social services and pensions.
However, roughly $900 million will be spent outside of the state’s main bank account to underwrite human services costs, and critics say moving the spending off-budget masks the true cost of state operations and the true increase in state spending.
WHAT WOLF GOT, OR NOT
Wolf, who is seeking a second term in November’s election, floated his fourth and most modest budget proposal in February. He appeared to get most of the spending he had requested, including an extra $40 million to expand high-demand computer and industrial skills training in high schools and colleges.
Republicans still rejected Wolf’s request for a fourth straight year for a severance tax on Marcellus Shale natural gas drilling and Wolf’s request for municipalities to start paying a $25 per-person fee for the state police coverage they receive, a total of $63 million a year.
Some state officials suggest Pennsylvania state government has turned a corner from the past decade of persistent post-recession deficits. With strong House Republican resistance to raising taxes over the years, the state government instead has patched over deficits with cuts, belt-tightening, one-time cash sources and a grab-bag of narrow tax or fee increases.
It is possible that the state has turned a corner: It expects revenue growth of around 4 percent in two straight fiscal years, perhaps the strongest two-year period since before the recession a decade ago.
However, the state is using roughly $1 billion in one-time cash sources to balance the new budget package. In a year, budget makers will be tasked with finding cash again to pick up those recurring costs, as well as any new spending or increasing costs. Even meeting a projection of 4 percent growth is unlikely to cover all of those costs alone.
Sen. Vincent Hughes, D-Philadelphia, said new school funding in the budget package helps reach one of Wolf’s first-term goals, to resolve a deep budget-balancing cut in state aid to public schools and universities in 2011 under then-Republican Gov. Tom Corbett.
It is arguable that education funding has fully rebounded since the roughly $1.1 billion cut in 2011, although that money has not necessarily returned to where it was cut from.
For instance, school districts – particularly Philadelphia – were once reimbursed for the cost of paying for students to be educated at a charter school. That reimbursement has not reappeared.
The State System of Higher Education and Pennsylvania’s four state-related universities – the University of Pittsburgh and Temple, Lincoln and Penn State universities – saw cuts of about $220 million collectively and, at $1.05 billion in total state aid in the coming year, remain about $140 million below their 2010 funding level.
Meanwhile, significant increases have gone to pre-kindergarten programs and special education, although both programs were relatively protected from 2011’s cuts.
Still, the Philadelphia-based Education Law Center said that, despite new money for public schools in the budget, the state “has miles to go to achieve a fair and adequate funding system.”
Legislation spurred by February’s high school shooting in Parkland, Florida, that killed 17 people sets up a state-administered grant program that will be seeded initially with $60 million.
School districts can apply once a year for a grant for a wide range of purposes, including safety and security assessments, security-related technology, staff training, counselors and police officers and anti-violence programs and counseling.
Each grant must be at least $25,000, capped at 10 percent of the cash in the program’s account. Up to $7.5 million will be set aside for municipalities, institutions of higher education and community organizations that undertake anti-violence programs.