2006-07 Fiscal Year
The ending balance for the current fiscal year is going to be $475 million after a transfer to the rainy day fund of $158 million. This huge surplus is due to a large revenue surplus of $649.8 million. That $475 million fund surplus will roll into the next fiscal year.
2007-08 Fiscal Year
The Governor’s certified revenue estimate for the 2007-08 fiscal year is expected to be $26.680 billion. One time revenues expected in the fiscal year will add $173 million to the revenues available. There are no tax increases in the budget as passed. The growth in revenue compared to 06-07 is $656.7 million or 2.4%. Expenditures of $27.162 billion represent 3.26% growth over the previous fiscal year.
Tax changes totaling $46 million for 2007-08 are included as part of the
final budget agreement. The table on the
next page shows the cost associated with each proposal. Below is a more detailed description of the
contents of the tax bill.
This
change would allow affected banks to deduct all goodwill from each of the 6
years that are used to average total equity capital under the bank shares
tax. Banks would not be allowed to
receive refunds for previous years in which they were required to include
goodwill. They would only be able to
reduce future tax payments.
The types of best management practices that would be eligible for the
credit are an agricultural erosion plan, a plan to reduce animal waste or other
pollution runoff plans. The bill would
establish different credit levels of 75%, 50% or 25% of the cost depending on
differing criteria of the project. A
project that cleans up sediment is the only type to which a 25% credit level
would apply. The Credit is capped at $10
million annually.
DEPARTMENT OF AGING
The budget shifts all currently general funded line items, with the
exception of the Alzheimer’s Outreach program, from the lottery fund. This would save the general fund in excess of $19.0 million.
Family Caregiver
Support Program
The Family Caregiver Support Program appropriation contains a small increase to provide for a 3 percent cost-of-living adjustment. This program is also supported by $10 million in federal funds. The program assists families who maintain frail relatives in their home. Working through AAA’s, the program provides benefits counseling and, depending on income, financial assistance including supplies, services and home adaptations and devices. It is anticipated that 5,545 families will receive these services in 2007-08.
Alzheimer’s Outreach
Services
The budget includes $250,000 for
Alzheimer’s Outreach Services. Federal
Funds used for Memory Loss programs are no longer available, however it is
anticipated that
Pre-Admission
Assessment
Funding for the Pre-Admission Assessment Program is increased by 34 percent for a total of $10.3 million in lottery funds. This increase reflects the transfer of assessment activities from PENNCARE to maximize federal earnings. This nursing home pre-admission screening program helps older Pennsylvanians and their families determine the least restrictive environment needed and assists them in securing and managing intensive in-home services tailored to their needs. It is anticipated that assessments and referrals to community services will increase in 2007-08. Referrals to nursing homes are expected to decrease.
PENNCARE
This budget includes a $15.0 million increase in the lottery funded PENNCARE appropriation to continue the current Attendant Care Program and provide services to an additional 346 recipients. Funds are also used for Older Adult Protective Services to investigate suspected elder abuse reports. The increase would also be used to provide a 3 percent cost of living adjustment for direct care workers and to provide services as a result of nursing home transition activities.
In addition, The PENNCARE appropriation includes $4.8 million to fund an initiative the Governor announced in February– Reforming the Long-Term Living System – aimed at reducing reliance on institutional long-term care and promoting growth of high quality home and community-based services.
Home and
Community-Based Services – Tobacco Settlement Fund
A total of $21.3 million in Tobacco Settlement funding is included in the budget to provide home and community-based services to older Pennsylvanians. This includes an increase of almost $2.0 million to continue current home and community-based services and expansion to additional recipients, as well as nursing home transition activities. In addition, $4.6 million is proposed to be used for the initiative -- Reforming the Long-Term Living System -- to reduce reliance on institutional care. Federal funds in the amount of $2.4 million are also provided for this initiative.
Reforming the Long-Term Living System
The budget includes a total of $12.9 million in lottery, tobacco and
federal funds for an initiative to reduce reliance on institutional long-term
care and promote growth of high quality home and community-based services. An additional 2,200 individuals over the age
of 60 will be able to remain in their homes or a community-based setting rather
than moving to a nursing home.
Providing services for the rapidly growing number of seniors, especially
those 85 and older, will present a major challenge for the commonwealth in the
coming years. The number of seniors
using home and community-based services has increased 70 percent since
2002-03. An additional 14 percent
increase is projected in the current year.
The problem will come to a head in the near future, as 2006 was the year
that the first wave of baby boomers, many struggling to care for elderly
parents, joined the ranks of the 60-plus year olds. By the year 2020, one in every four Pennsylvanians
will be age 60 or older.
PACE and PACENET
The Pharmaceutical Assistance Program provides help to qualified older
Pennsylvanians who are 65 years of age and over and whose cost of drugs is a
burden to them. The program is financed
by the Lottery and Tobacco Settlement Fund revenue.
The commonwealth has expanded its PACE and PACENET programs to make them
compatible with and complementary to the new Medicare prescription drug
program. PACE Plus Medicare enables
cardholders to take advantage of the features of both PACE and the new Federal
Medicare Part D benefit by filling the gaps encountered by cardholders in
Medicare Part D including deductibles, the donut hole phase of no Medicare
coverage, and co-payment differentials between the Part D plan coverage and the
PACE and PACENET copayments. PACE Plus
pays the Medicare premiums for Part D coverage PACE cardholders, while PACENET
cardholders pay the Part D premium.
With a heavier reliance on lottery funds and a reduced use of tobacco settlement
funds, the budget for 2007-08 will allow the average number of seniors covered
by PACE, PACENET or PACE Plus Medicare to rise to 357,725 which represents an
additional 32,000 seniors. This
represents a 10 percent increase over those receiving services in 2006-07 and a
60 percent increase since 2002-03. The
budget includes $276.4 million in state funds to continue these programs.
Agricultural
Promotion
To improve the economy of our state and the food industry in general,
programs have been developed. The agriculture promotion programs have been
developed to enhance the ability of
Agricultural Research
Agricultural research is the basis for continued strong, viable and
profitable agriculture. Through research
conducted by the PA Animal Diagnostic Laboratory,
State Food Purchase Program
This program provides grants to counties to purchase food to be
distributed to the indigent. Grants are
based on unemployment levels, legal immigrants, and medical assistance
recipients. The Governor recommended that $18 million be appropriated
in the 07-08 state fiscal year to the State Food Purchase Program. The 2007-2008 approved budget reflected the
same level of funding.
The Pennsylvania Diagnostic Commission is part
of a nationwide network of state and federal laboratories dedicated to
identifying and combating animal diseases.
This essential program received $6.67 million in the 07-08 budget which
will assist the Vet labs to test various animal diseases.
State spending for the Department of Corrections will reach $1.6 billion, an increase of $184.1 million, or an 11.5% increase from the 2006-2007 fiscal year. This significant increase is partially due to expansion at current SCI facilities and the re-opening of SCI Pittsburgh.
The SCI appropriation has increased $163 million over FY 06/07 to $1.31
billion. The inmate population is the single most important factor affecting costs
in the correctional system. By December
2007, the inmate population is projected to grow to 45,596, an increase of
1,500 from December 2006. When
factoring in the cost of inmate health care, education and training expenses,
the current average cost per inmate is $38,518.
Due to the inmate population increase, the Department is re-opening SCI
Pittsburgh with an initial capacity of 750 beds as of July 2007 and an
additional 750 beds after January 1, 2008.
The Medical Care appropriation is $204 million, an increase of $16
million. Following a National trend,
every year sees an increase to the cost of providing adequate healthcare to the
inmates, especially the elderly population.
The Inmate Education and Training appropriation is $46 million, which is $4 million more than in FY 2006-2007.
Probation and Parole spending will total $106 million in FY 2007/2008, which is an increase of approximately $8 million from last year.
In the enacted 07/08 budget, the General Government Operations appropriation received a decrease of approximately $7.8 million or 9% below the Governor’s FY 06/07 budget.
The Sexual Offenders Assessment board remained at the Governor’s February budget proposal of $3.7 million, as did the Adult Probation services appropriation at $19.3 million.
DEPARTMENT OF
COMMUNITY AND ECONOMIC DEVELOPMENT
Economic Stimulus programs, community and business incentive spending, and other investments in education and training initiatives continue to produce an expanding state economy. Total state non-farm employment is about to rise above 5.8 million jobs, while our 4.2% unemployment rate continues to trend below the national average.
A slowing housing market and lower projected GDP growth provided a cautionary note for the 2007 state economy when the year began, making commonwealth investments for new jobs and expanded commerce even more important this year.
Commonwealth
Financing Authority
Economic Stimulus resources invested through the Commonwealth Finance Authority (CFA) have already committed $300 million in infrastructure financing to prepare new sites for business development, and $200 million for water infrastructure improvements. Other CFA programs have provided nearly $50 million for venture investments, $50 million for commercial development targeted to rebuild town centers throughout the commonwealth, and nearly $45 million for new agricultural development opportunities. CFA debt service payments to finance the bonds issued to support these investments will rise to $47 million in the new budget, an increase of $10.1 million above current year expenditures.
Business Financing
Programs
A recapitalized Machinery and Equipment Loan Fund (MELF), through a $75 million transfer from the Commonwealth Finance Authority, $45 million Opportunity Grant program, $22.5 million Infrastructure Development program, a revitalized Small Business First Fund, and revolving loan investments through the Pennsylvania Industrial Development Authority will combine to provide an estimated $400 million for business investment and job development.
Since 2000 manufacturing employment in the commonwealth has declined by 248,000 jobs. This decline has reduced the manufacturing share of our workforce from 16.3% to 11.9%. Long term stability of our state economy will depend upon strategic investments to strengthen our competitiveness. The proposed budget would have redirected 4% of annual Tobacco Settlement Fund payments ($13.4 million) to invest $6.7 million in new Health Venture Account projects, and $6.7 million for biotechnology commercialization. The final budget agreement delays these funding decisions until the Fall when the legislature will consider funding these proposals along with the Governor’s $500 million Jonas Salk Legacy Fund. The budget does fund a $5 million increase for Infrastructure & Facilities Improvement Grants, providing $20 million for the 2007-08 fiscal year.
Technology Programs
The budget increases support to the Ben Franklin Technology Development Authority Fund by $1.5 million, to total $51.7 million. The increase will support the creation of up to 6 new Keystone Innovation Zones, created to foster business, higher education and community collaboration to spur development.
Film Grant Program
The final budget agreement will fund a new $75 million film tax credit program and will continue to provide $5 million for the Film Grant Program. The grants and tax credits will be used to stimulate film production here in the commonwealth, including early project development work.
Community
Revitalization
The budget includes $34 million, a $4 million increase, for Housing & Redevelopment Assistance. New community initiatives included in the proposed budget include a $926,000 increase in Land Use Planning Assistance, and a new $1 million appropriation to the Community Action Team to support downtown development, merger, and other consolidation initiatives to improve local service delivery.
DEPARTMENT OF CONSERVATION AND NATURAL
RESOURCES
In the budget for fiscal year
2007-08, the largest increase is within the Forest Pest Management component of
the department. The funding provided for
pest management is $5.2 million. The
growing number of gypsy moths, along with other insects in the 2.1 million
acres of forest land represents the need for additional funding for forest pest
control. DCNR manages almost 2.4 million
acres total of state park and forest land.
The state park system in the Commonwealth is comprised of 116 parks and
2 conservation areas within 62 counties.
The funding levels for both State Parks and
Growing Greener II
The budget for 2007-08 also includes
funds from the Growing Greener II bond initiative. Growing Greener II was established in May
2005 and will provide the department with $218 million over the next six years
to improve state parks and forests, community park and recreation grants and
for open space conservation. Also
included in the proposed budget is an increase in the municipal waste disposal
fees. These fees, when collected, are
dedicated to the Environmental Stewardship Fund. It is anticipated that in FY 2007-08 these
fees will contribute $8.4 million and in the following years $11.2 million
annually and will contribute to the debt service cost in the amount of $625
million that was incurred by the Growing Greener II environmental bond
issue.
The following chart shows the improvement project totals through July
2006 that were accomplished with Growing Greener II monies.
|
|
Amount |
Grand
Total |
|
|
$4
million |
|
|
Open Space Conservation |
$26.1
million |
|
|
State Parks & Forests Improvements |
$36.6
million |
|
|
|
|
$
66.8 million |
This
$625 million, six year Growing Greener II plan is providing:
·
A total
of $217.5 million to DCNR for the projects like above.
·
Programs
that have already received this critical funding include:
·
$40.6
million for 63 community parks, recreation and state park & forest
improvement projects.
·
$26.1
million in order to preserve 13,214 acres of open space
·
In
order to ensure continued funding to maintain expenditure levels, this budget
proposes a $0.50 per ton increase to the municipal waste disposal fee.
Through the Environmental
Stewardship Fund there are also increases in some appropriations. They are an increase in the amount of $1.2
million for Parks and Forest Facility Rehabilitation, $1.3 million in Community
Conservation Grants and $230,000 for Natural Diversity Conservation Grants.
DEPARTMENT OF
ENVIRONMENTAL PROTECTION
The passed budget for DEP could be called a return to core functions. There are hefty increases in the Environmental Program Management and Operations line items which increase by 8% and 10% respectively. But total General Fund expenditures actually decrease by 1.7%. The decreases are primarily in the grant programs administered by the Department.
The following grant programs are eliminated in the budget: Storm Water Demonstration Project, Water Contamination Remediation, Alternative Energy Initiatives and Chesapeake Bay Education. A new $300,000 expenditure for municipal climate change plans is added.
Environmental
Stewardship and Hazardous Sites Clean-up Funds
Neither of the Governor’s proposed increases in the tipping fees paid for municipal trash was implemented as part of this budget. The Governor proposed a 50 cent per ton increase to the Environmental Stewardship Fund (ESF) to help pay the fund’s share of the debt service on the Growing Greener II bonds. The fund will pay those increased costs out of existing funds.
A more substantial tipping fee increase of $2.25/ton of municipal waste had been proposed for the Hazardous Sites Clean-up Fund (HSCA). Instead the fund will receive a share of the Keystone 93 distribution worth $19 million for both 2007-08 and 08-09. This amount combined with an estimated $32 million existing in the fund will maintain the HSCA fund at a minimal operating level. The amounts going to HSCA and Keystone 93 are shown in the accompanying table.
Energy
The
Governor’s bold energy proposal was not enacted into law except for some small
changes updating the Alternative Energy Portfolio Standards to clarify the
“force majeure” requirements and placing smaller step ups to the desired
amounts of alternative energy that is to be sold in
The final budget agreement provides an unprecedented $720 million increase in state Education spending. The largest single component of this increase is a $265 million, 5.87% increase in the Basic Education Subsidy, including foundation funding of $64 million targeted to the lowest spending districts within the commonwealth to help them raise per pupil spending above $9,030 per student.
The
proposed funding for basic education programs would increase state support by
$1.8 billion above spending levels when the Governor’s term began, continuing
state efforts to dramatically increase our commitment to local school
districts. More importantly, these investments
appear to be showing results. Since 2002
the number of 5th grade students meeting state assessment standards
in math has increased from 53% to 69%.
Early Childhood &
Tutoring Assistance
Targeted initiatives to fund early education and tutoring assistance continue to be expanded significantly. These investments have already enabled 12,500 additional students to enroll in pre-kindergarten, while an additional 4,710 students are now able to participate in Head Start. The budget provides $250 million for the Accountability Grant Program, a $50 million increase, $70 million for tutoring assistance, and $40 million to supplement federal Head Start programs, a $10 million increase, to build upon these initiatives.
Science &
Technology Initiatives
High school reform, through the Project 720 program, will receive $8 million, a $3.3 million increase above the current year. Several new initiatives will bolster science and technology programs. A $10 million program will support efforts to improve elementary science instruction through hands on learning and new curriculum training. The budget will provide $20 million to place internet-equipped laptop computers in math, science, English, and history classrooms and equip teachers with multi-media technology. The budget also provides $8 million for dual enrollment programs, a $3 million increase above the current year.
Special Education
Special Education programs will receive a $27.5 million, 2.9% increase. Early Intervention funding will increase $14.1 million, totaling $137.6 million. Approved Private Schools will receive nearly $86.5 million for the next fiscal year and a $1.3 million requested supplemental appropriation for the current year to meet legislated requirements to maintain total funding levels at 125% of the increase in funds for special education programs. Chartered Schools for the Deaf and Blind will receive $32.9 million, more than a $1 million increase. The budget also provides $10 million to resolve remaining prior year audits, although this unresolved liability may be as high as $30 million.
Aid to
Aid to Nonpublic schools would be increased by 5.87%, including $83.6 million for Services to nonpublic schools and $25.58 million for Textbooks, Materials and Equipment. Charter school reimbursements to public schools will be increased by more than $34 million, to total $126.7 million. The increase reflects an attempt by the commonwealth to maintain reimbursement rates above 27% of total charter school costs. Rapidly rising charter school enrollments continue to increase these costs dramatically.
Public Library
Subsidy
The Public Library Subsidy Program supports and improves state and local library services and ensures access to these services. The budget agreement includes a 23% increase for library services or an additional $14.1 million over the current year’s appropriation, for a total of $75.5 million. This significant increase brings the Public Library Subsidy to its highest level in history and among the three highest funding levels in the country.
EITC
The EITC is a tax credit provided to businesses for contributions made to scholarship organizations, including pre-kindergarten scholarship programs. The budget agreement includes a $15 million increase over last year, increasing the total amount to $75 million.
Other Increases
Other significant funding increases include a $9.5 million increase for Teacher Professional Development, to total $23.4 million, a $17 million increase for Pupil Transportation, totaling $512.7 million, an $18.2 million increase, totaling $474.6 million for School Employees’ Social Security costs and a $368.7 million appropriation for School Employees’ Retirement costs, a $114 million increase to cover increasing employer contribution rates.
Community Colleges
The budget includes a 3 percent increase for operating funds for community colleges, or an additional $6.7 million. In addition, a total of $44.05 million is included for the commonwealth’s share of approved capital debt service and lease payments. Together this represents an overall 3.5 percent increase in spending on community colleges.
Funding for the community colleges is shared by sponsoring counties or school districts, the students through tuition payments and the commonwealth. State funding includes a hold harmless clause so that no institution receives less than the prior year’s funding. In addition to a base supplement of funds for a current fiscal year, there is a growth supplement designed to provide additional funding based upon full-time equivalency (a measurement of full-time enrollment in individual community colleges). Finally, there is an economic development stipend which is based upon enrollment and is designed to fund colleges with programs that focus on high-priority occupations. The state annually publishes a list that identifies these occupations.
The budget includes the Governor’s $2.0 million initiative to create new opportunities for postsecondary education and training in underserved regions in high-demand technical fields by launching the state’s first two Technical Colleges. The Technical Colleges will be located in parts of the state where students do not currently have access to affordable certificate and associate degree programs to prepare for high-skill technical occupations like engineering.
State System of Higher Education
The State System of Higher Education will receive an additional $16.4 million, or a 3.36 percent increase over the current year. Funding for the Education and General line is increased by 3.5%. Funding is distributed through the Chancellor’s Office to individual universities in accordance with a formula that considers the enrollment and programs of the school and the cost of operating and maintaining the individual campuses.
The PASSHE appropriation consists
of various line items including state universities, recruitment of the disadvantaged,
affirmative action and program initiatives, as well as the PA Center for
Environmental Education and the
In addition, PASSHE will receive $13.18 million in Keystone Recreation, Park and Conservation Fund money for deferred maintenance projects.
Currently there are more than 109,000 full and part-time students attending these universities and the current instate tuition is $5,038 per year (room, board and fees are extra and vary among the universities).
State-related
Universities*
Academic Medical
Centers
The budget for 2007-2008 provides a 2 percent increase in payments, or a total state appropriation of $21.59 million.
State-Aided Institutions*
Eleven additional institutions of
higher learning receive some financial assistance from the commonwealth. On average, state support for the
*See non-preferred print-out for
a breakout of funding for individual institutions.
PA HIGHER
EDUCATION ASSISTANCE AGENCY
Grants to Students
The budget includes level state funding for the Grants to Students Program. This is the state’s scholarship program which helps students pay tuition at an accredited college or university.
PHEAA will continue the commitment made under the GIFTS initiative and will provide up $60 million to supplement the state appropriation. In addition, PHEAA will provide $15 million in PHEAA earnings – for a total PHEAA contribution of $75 million.
The PHEAA Board annually determines the distribution of funds to applicants on criteria including family income, family size and the cost of the institution the student will be attending. Currently the number of grant recipients is 166,210 students, the average award amount is $3,100 and the maximum award is $4,500.
A new grant formula implemented in 2006-2007 is designed to produce grant awards that cover a greater portion of college costs for needy students, regardless of whether a student is attending a community college or a high priced private college.
Institutional
Assistance Grants
The budget includes a $621,000 increase for the Institutional Assistance Grants Program, or a 1.5% increase. These funds assist 85 independent, post-secondary institutions to stabilize education costs which benefits student grant recipients enrolled at those institutions. This funding level will slightly increase the per capita grant of $1,061, a $9 increase over 2006-2007, based on an estimated 39,558 students.
Matching Funds
Program
The Matching Funds Program, which disburses matching funds as a percentage of the federally-required match for the Federal Perkins Loan Program and the Federal Work-Study Program is level funded at $14.1 million.
Agricultural Loan Forgiveness
Program
The budget continues the Agricultural Loan Forgiveness Program and includes an appropriation of $85,000. The program forgives up to $2,000 each year with a maximum forgiveness of $10,000 per recipient.
New Economy
Technology Scholarships
The budget includes state funding
of $4.35 million, for the New Economy Technology Scholarships, to be
supplemented by PHEAA business earnings of $2.45 million for a total of $6.8
million. The maximum grant award is
$3,000 per year. Scholarships are
awarded to
Nurse Educator
Shortage Initiative
The budget includes $2.45 million for an initiative aimed at increasing the number of nurse educators in the commonwealth. Funds would be available to nursing schools to help cover the difference of what a person can make as a practicing nurse versus an educator.
An appropriation of $2 million is
included for the
The appropriation recommended to be
authorized in the budget for fiscal year 2007-08 is approximately $54
million. These appropriations will be
made from the restricted revenue accounts within the State Gaming Fund. The following is a breakdown of the
appropriations recommended for the various departments that work with the
Gaming Control Board as well as the Board itself.
|
|
$29,984,000 |
|
Department of Revenue |
7,786,000 |
|
|
11,573,000 |
|
Office of Attorney General |
799,000 |
The Pennsylvania Gaming Control
Board will obtain a loan from the Property Tax reserve account in the amount of
$22,575,000. This loan will be repaid by the slot operators when all 11 slot
machine licenses have been issued and all the facilities are operating. At that time the Board will adopt a repayment
schedule based on the assessment of each slot machine licensee’s gross terminal
revenue.
In December 2006 the PGCB issued 11 permanent
operator licenses. Five of the licenses
issued were to Category 2 applicants and six Category 1 licenses. However,
payment of these license fees is not due until such time that the license is
issued. Due to the fact that many of
these facilities have yet to open, the Board is faced with a short fall of
revenue that had not been anticipated.
They do expect funds to come in once licensed facilities begin repaying
the Board for their investigative fees.
However, because the anticipated opening dates are staggered, the return
of those fees to the Board will be as well.
In order to make up for this shortfall, the PGCB has now implemented a
draw down program from the facilities that are already operating. What this entails is that on a weekly basis
the Department of Revenue will “draw down” from each facility $800,000 and 1.5%
Gross Terminal Revenue (GTR) from each facility.
Currently these “draw
downs” are being taken out of the Section 1401 accounts which were created by
the General Assembly under Act 71. Each
facility is required to deposit $5 million into this account two days prior to opening. Today only five of these accounts exist.
The Department of Health’s budget contains pieces of the Governor’s
major initiative for health care, “Prescription for
Infectious Disease
One of the initiatives that is being funded in this budget mandates that
health care providers re-examine the manner in which they treat patients. Currently, there are 20,000 cases of hospital
acquired infections. These infections
have contributed to nearly 2,500 deaths in one year, and have increased the
average hospital stay to more than 16 days.
This number could be seriously reduced, potentially saving $3.5 billion
in hospital care and countless cases of human pain and suffering.
Sb968 specifically addresses this problem. In this measure, a health care facility and
an ambulatory surgical facility shall develop and implement an internal
infection control plan to promote the health and safety of patients and health
care workers, providing care to these patients.
The infection control plan establishes a multidisciplinary committee
that shall include medical staff, administration, laboratories, nursing and
pharmacy. The plan shall measure the
effectiveness of detection, control and prevention of health care-associated infections. It shall include a system to identify and
designate patients known to have been infected with a microbial infection or
resistant organism. Each plan shall be
required to contain an intervention protocol that includes: infection control
precautions, treatment protocols, isolation procedures, and mandatory
educational programs for personnel. The
plans shall be submitted to the Department of Health. However, hospitals shall report health care
associated infection data to the Center for Disease Control. Each nursing home shall pay the department a
licensing fee sufficient to operate the Patient Safety Authority. The total realized by the department from
this assessment amount shall not be more than $1 million per year. This year’s budget provides $2 million for
the start-up and operation of this new program.
Scope of practice
Another component of the Prescription for
Antiviral Stockpiles
The Governor recommended in the 2006-07 budget that $14.056 million be
used to purchase and stockpile antiviral stockpiles. This effort is part of the Commonwealth
influenza pandemic preparedness planning efforts that have been recommended by
the federal government. The General
Assembly agreed with this level of funding especially in light of the
seriousness of the disease, and approved funding this program at $14.05 million
for the 07-08 state fiscal year.
Quality Assurance
In the Governor’s 2007-08 budget, there is an increase of more than $2
million in the program entitled, Quality Assurance, from the prior year. The 2007-08 budget appropriates $18.3
million. It is expected that much of
this money will be used to step up efforts in this Bureau to inspect birthing
centers and rural health care clinics.
AIDS programs
The line item, AIDS Programs, funds services that provide testing for at
risk populations, as well as those who have acquired AIDS. Case management is another necessary
component of the AIDS Program that provides wrap around services for those who
are seriously ill. The legislature
increased the Governor’s proposed funding level of $9.5 million to $10 million
or $500,000.
HISTORICAL
AND MUSEUM COMMISSION
The Historical and Museum Commission provides state and local museum assistance.
Museum Maintenance
Program
The Commission’s Maintenance
Program is $2.0 million in 2007-2008. In
addition, funds from the Keystone Recreation, Park and Conservation Fund for
historic site development are $6.4 million.
Funding is available to
Museum Assistance
Grants
The budget includes $4.1 million in
funding for the Museum Assistance Grant Program. The Museum Assistance and Local History Grant
Program is a competitive financial assistance process available to all qualified
history related institutions within
Non-preferred
Museums*
The budget includes level funding for the individual Non-Preferred Museums that historically receive financial assistance from the state in non-preferred appropriation bills.
*See non-preferred print-out
for a listing of individual museums.
All of the appropriations within the
Insurance Department were funded at the levels proposed by the Governor in his
February Budget. The most important
change from the previous fiscal year is the additional money which is provided
for the Cover All Kids program.
The enabling legislation for the
Cover All Kids program was adopted by the legislature in the fall. For FY2007-08 the budget includes $12.2
million in state money and $20.5 million in federal money to cover a total of
21,000 additional children. Current
enrollment in the CHIP program is 161,402 as of June 2007. In January of 2007 the enrollment was 152,349.
Current enrollment in the adultBasic
program is 46,663 with an additional 101,077 people on the waiting list. The Governor’s budget proposed funding only
half a year of the adultBasic program as it would then become part of Cover All
Pennyslvanians. Given that Cover All
Pennsylvanians, however, has not been enacted as part of the budget, adultBasic
will be funded for the entire fiscal year as it has been in the past.
The FY 2007-08 budget provides $6
million to repay the loan to the General Fund made by the Underground Storage
Tank Indemnity Fund. This is the same
amount that was enacted in the FY2006-07 budget.
All of the appropriations for the Judiciary see modest increases of 2% with the exception of the transfer from the restricted account for the Judicial Computer System which is $49.6 million, an increase of 18.8%. The budget also splits the current Judicial Council line item into a new Interbranch Commission line item.
Funding for the legislature is proposed at current fiscal year levels except for the following lines:
· The Legislative Drafting System line is zeroed as it was a one time expense.
· The Health Care Cost Containment Council and the State Ethics Commission are given increases of $393,000 and $91,000 respectively.
Through the final budget agreement Employment Services, whose program
was originally completely eliminated in the proposed budget, has been restored
to $10.7 million. Although this is a
reduction in funding, many services that would have been cut completely will
now be available. However, this is not
true for the Self Assistance Employment program. Although the merits of this program were not
disputed, this program was also originally cut from the proposed budget and the
restoration in funding available is $500,000.
A funding increase in this budget is
for a change to be made in the Worker’s Compensation Program through the
Workmen’s Compensation Administration Fund.
The appropriation for this fund is approximately $2.2 million. This program provides income and medical
services to those who qualify. Included
in this program are workers’ compensation, unemployment compensation,
occupational disease payments and social security disability payments. In the
final budget arrangement however, the funding for occupational disease payments
has been reduced to $1.1 million, a difference of approximately $184,000.
Self Employment Assistance and Employment
Services
Through the 2007-08 budget agreement
both of these programs have been reduced most dramatically. The Self Employment Assistance program, as
mentioned above, has been reduced from $3 million to $500,000. In addition, the funding for Employment
Services has been reduced by nearly 50%.
The original funding which was at $20.9 million has now been reduced to
$10.7 million.
Job Training & Industry Partnerships
The Department of Labor &
Industry is the lead agency in the administration of the interagency employment
and training programs for the Commonwealth’s adult labor force and youth. The industry partnerships that were set up
through this program received $5 million in the final budget agreement where
the funding falls under Industry Partnerships.
These partnerships have assisted in creating opportunities for a variety
of the Commonwealth’s citizens. Included
are TANF clients and those who are unemployed.
In addition, programs have been established to provide at risk youth
with skill development, career education and job placement. These industry partnerships have become a
valuable resource that assist both the workforce and workplace as these two
groups are now able to fulfill the other’s needs.
New Directions
Since 1987 the Departments of Public Welfare and Labor & Industry
through this program have had a collaborative agreement to assist individuals
receiving welfare.
An additional cut that was proposed
in February was a reduction in funding in the amount of $450,000 for the
Centers for Independent Living. However, through the final budget this funding
has been restored to last year’s funding level as a result of the restoration
of $450,000 making the total funding amount at $2.25 million.
The 2007-2008 budget includes $19.8 million for the Department’s general government operations. This is an increase of $1.1 million above FY 2006/2007.
The Veteran’s Homes received an additional $7.8 million in state funds for a total of $91 million. The consolidation of the six veteran’s homes appropriations into a single appropriation has allowed the Department to improve program management and enhance operational efficiencies at these facilities.
The
The enacted budget funds the
Educational Assistance program at $8.1 million.
This program provides 100% tuition grants for National Guard members in
The Disabled Veterans Transportation program will be at $350,000 in FY
2007/2008.
The Civil Air Patrol, eliminated from the Governor’s FY 07-08 budget
request, will again receive $450,000 in the enacted budget for the coming year.
TOBACCO SETTLEMENT FUND
Background
The Governor and the General Assembly in the 2005-06 fiscal year enacted
Act 41 of 2005. This Act redirected
12.5% of the funds allocated to health care insurance for uninsured adults and
25% of the funds that were going to tobacco cessation and prevention to fund
long term care services for senior citizens and persons with disabilities.
In the 2007-08 budget the Governor estimated that the Tobacco Settlement
Fund would receive $406 million.
However, since the number of cigarettes being sold has decreased the
state received $348 million
Health Care Insured for the Uninsured: In 2005-06 the state was able to expand
enrollment in Adult Basic (ABC) by approximately 50,000 individuals. The state was able to expand this program by
receiving funds from the Community Health Reinvestment Agreement with four
major Blue Cross and Blue Shield plans.
For 2007-08 this agreement equated to approximately $99.6 million. This money in the Community Health
Reinvestment Agreement will be allocated to Adult Basic Insurance. However, in the eminent future the
implementation of “Cover all Pennsylvanians”
will expand the amount of people who have been receiving adult health
insurance through the program expanded
through the Tobacco Settlement funds.
Consequently more people will have health insurance thereby decreasing
the need for the Hospital Uncompensated Care segment of the tobacco settlement
fund. Overall, the Health Care Insurance
for the Uninsured is expected to receive $187 million.
Many of the proposed changes in the programs offered under the Tobacco
Settlement Plans in the 2007-08 budget were not adopted at this time, with the
Jonas Salk Legacy Fund being one of them.
In the Fiscal Code there were some changes to the Tobacco Prevention and
Cessation program regarding the allocation of funds. Prior to this budget 30% of the grant was
allocated to 48 primary contractors with many counties not having any primary
contractor. The remaining 70% was driven
out by using population figures.
However, this 2007-08 budget provides that counties shall join together
to receive Prevention and Cessation monies.
There will be only 8 primary service providers to dispense 30% of this
money to various regions in the state.
70% of the funds left in the program will be given as grants to primary
contractors and then allocated to counties who have a population of greater than
60,000.
NEW
TRANSPORTATION FUNDING ITITIATIVE
Beginning in fiscal year 2007-08 the Pennsylvania Turnpike Commission
(TPC) and the Department of Transportation (PennDOT) will enter into a
public-public partnership in order to deliver one of the largest infusions of
money into roads, bridges, and transit in the history of the Commonwealth.
The TPC will enter into a fifty year lease agreement which will require
it to make payments to PennDOT. In
return, the TPC will be allowed to toll and operate Inter-state 80.
Below is a chart of scheduled payments from the TPC to PennDOT:
|
Fiscal Year |
Total Transfer to
PADOT |
Funding for
Transit |
Funding for Roads
and Bridges |
|
2007-2008 |
$750M |
$300M |
$450M |
|
2008-2009 |
$850M |
$350M |
$500M |
|
2009-2010 |
$900M |
$400M |
$500M |
|
2010-2011+ |
$900M + 2.5%cola |
$400M+2.5%cola |
$500M +2.5%cola |
The TPC will meet these financial requirements in three ways: by issuing
up to $5 billion in Motor License Fund backed bonds*; using excess Turnpike
spine-line revenue and monetizing future spine-line revenue; and using excess
Interstate-80 revenue and monetizing future Interstate-80 revenue.
*The debt service on the bonds
backed by the Motor License Fund will be paid by the Commission. The issuance of these bonds will have no
effect on the amount of funds available in the Motor License Fund.
Transit Funding Changes
HB1590 completely restructures the way mass transit is funded in
Sources of funding: The
following will be deposited into the Public Transportation Trust Fund annually.
|
|
PTAF Money |
4.400% of Sales Tax** |
Lottery Money |
TPC Money* |
Act 3 Capital Commitment |
TOTAL |
|
FY2007-08 est. |
$180.3M |
$392.8M |
$80M |
$300M |
$125M |
$1.08Bn |
*Beginning in FY2010-2011 this money will be
increased by an annual 2.5% COLA ($250M of this will be operating money in each
fiscal year)
** This amount is equal to the total general
fund appropriations for transit , plus the $75M in funding from Act 3.
Distribution of Funding: The
funds in the Public Transportation Trust Fund will be distributed approximately
as follows:
|
|
Operating |
Asset Improvement |
Dedicated Capital |
Programs of Statewide Significance |
New Starts |
|
FY2007-08 |
$785M* |
$175M** |
$75M |
$52M |
*** |
* This represents a $250M
increase over their current operating funding
** Initially this allocation
will consist of the proceeds of Commonwealth capital bonds which will be
supplemented by $50M from the TPC in FY2007-08, in FY2008-09 this will be
supplemented with $100M from TPC, in FY2009-10 with $150M, and in FY2010-11
forward FY2011-2012 increased by 2.5% annually
*** PADOT is authorized to
spend up to $50M a year on matching funds for Federal New Start programs.
Transit Provisions
Roads and Bridges Provisions
Other Provisions
MOTOR LICENSE FUND
The Motor License Fund is the
central repository for the taxes and fees that have been placed on gasoline,
diesel fuel, alternative fuels, Motor Carrier Road Tax, Vehicle Registration
and titling, driver licenses, taxes on oil franchise companies, liquid and
alternative fuels, fees received from other states, and vehicle code fines.
The official Motor License Fund
revenue estimate was $2.322 billion for the 06-07 fiscal year. The actual revenue for the 2006-07 fiscal
year was $2.295 billion. Prior year lapses
increased from $58 million in 2006-07 to $76.13 million in the 07-08 fiscal
year.
Highway Maintenance
The 2007-08 budget proposals for state highway and bridge maintenance
provides $900 million under the “Highway Maintenance” heading and cited in
PennDot budget proposal documents (E40.15).
Highway Maintenance programs under this broad heading of “Highway
Maintenance” include “Smoother Road and Priority Bridges”, “Highway
Maintenance” is driven out to the counties by formulae on a ten year
basis. The “Bridge Preservation program”
will receive $18 million of the $900 million.
Highway Construction
The FY 2007-08 budget proposal provides $581.16 million in state funds
for Highway Construction. In the 06-07 fiscal year $613 million was
appropriated for highway construction.
The final budget’s level of funding for the 07-08 fiscal year reflected
the proposed level of funding in the Governor’s budget. Under the umbrella heading of Highway
Construction are programs such as: “Highway and Safety Improvements”,
“Highway Capital Projects,” “Security
Walls”, Highway Capital Projects, (EA) “Highway Bridge Projects (EA)” and the
“Bridge program” (EA). These funds will
be used to begin construction and reconstruction work on interstates and state
highways that contribute to the Commonwealth’s economy and provide mobility for
its people. With the appropriated level
of funding for Highway Construction
25 miles of new highway will be constructed, 75 miles of Interstate
highway restored and 232 bridges repaired or replaced (without $450
million). A portion of the $450 million
for the 07-08 fiscal year found in Hb1590 will find its way to Highway
Construction especially for deficient bridges.
STATE ROW OFFICES
The appropriation changes for the Attorney General, Auditor General and State Treasurer are listed below:
The Commonwealth’s General Fund total expenditures are projected to grow
by $843 million or 3.2%, while DPW’s General Fund spending will grow by $340
million or 3.7%, which is in line with the Commonwealth’s overall budget
growth.
Despite constrained general fund spending,
the Department’s budget still contains expansion in program spending and does
not include any client or service reductions in the Medical Assistance (MA)
program.
Medicaid
The most significant issues in the
department relates to Medical Assistance.
This is part of a NATIONAL TREND.
Caseloads are increasing due to a growing elderly population.
Medical
Assistance Appropriations
(numbers
are in thousands)
FY 06/07 FY 07/08 Difference
Outpatient $671,472 $593,992 ($77,480)
Inpatient $513,020 $468,589 ($44,431)
Capitation $2,672,635 $2,715,022 $42,387
LTC $695,279 $762,585 $67,306
Medicare Part D $338,500 $351,008 $12,508__
Total $4,890,906 $4,891,196 $290
|
Governor’s
Plan |
Budget
Agreement |
Cost/Savings |
|
Move from a Prospective Pymt System to
Retrospective Pymt System |
Retrospective payment system |
($200.3 Million) |
|
3% Avg. Rate Increase for MCOs and Nursing Homes |
Average 3% rate increase |
$170.9 Million |
|
MCO Pharmacy Carve Out |
No MCO Pharmacy Carve Out |
$45 Million |
|
Eliminate CAF |
Restoration of CAF |
$7.1 Million |
|
LTC appropriation supported by Lottery and
Tobacco Funds |
Lottery and Tobacco Fund Support |
$353.6 Million |
|
Redirect Voluntary Managed Care clients |
No redirection of clients |
$23 million |
|
2% Avg. Rate Increase for Hospitals |
Average 2% rate increase |
13.5 million |
Services for Children
Child
Welfare funding will
increase from $881 million in 2006-07 to $967 million 2007-08. The primary reason for the $86 million
increase is due to approved costs in the county needs-based budgets and the
loss of available federal TANF funds.
In 2007-08, the TANF Child Welfare Transition appropriation will be restored to $20
million, which is $25 million less than the current year funding level. The phase-out of the TANF Transition funds
was part of an initiative the Administration proposed in the 2005-06 budget.
The Child
Care Services appropriation has received an additional $37.2 million over
FY 2006/2007. Approximately one-half of
the increase will be used for the Early Education and Care Initiative to
provide subsidized child care services to an additional 400 low – income
children and to improve accountability for children’s early learning
experiences in Keystone Stars program.
A new appropriation, Child Care Assistance, contains $215.4 million for FY 07/08. These funds were transferred from the Cash
Grants appropriation and are being used to provide quality child care to people
currently or formerly receiving TANF.
Approximately $28 million of the total funding will be used to maintain
the number of funded child care slots and to increase child care provider rates
ensuring access to quality care.
Mental Health and Mental
Retardation
The Mental Health
program will receive a significant increase over FY 06/07. The increase of $38.2million contains a 3%
cola and funding for the following:
1) An additional 200 patients into community
programs who are currently hospitalized within the State psychiatric hospital
system
2) Specialized respite care services for
families that have children with serious emotional disturbance. The Governor estimates this funding will
enable 2,000 families to receive an average 12 hours of respite service during
FY 07/08.
The Mental Retardation program will also receive
a substantial increase under the Governor’s budget: $78.5 million or 9.9% for
Community Mental Retardation Services and nearly $16.6 million or 16.2% more
for Early Intervention. The expansion in
Community Mental Retardation will provide six month funding for the following:
1) Community residential services for 963
individuals on the county waiting lists
2) 1,592 individuals on the county waiting
lists to home and community based day and individual support services
3) Services for 73 individuals with mental
retardation who will turn 21 years of age and will no longer be eligible for
services under Medical Assistance EPSDT program
In addition to the service expansion above, 800 special education
graduates will receive daytime activities.
The Governor’s final
budget includes $9.9 million for Autism Intervention and Services, an increase
of $7 million over the current year. The
additional funding will provide resources necessary for client intake,
assessment and eligibility determination, and funding for provider monitoring
and rate setting.
Early Intervention appropriation includes
expanded services for 2,690 additional children.
Other Social Programs
The budget provides
substantial increases in appropriations for Services to Persons with
Disabilities (16.8 million) and Attendant Care ($17.2 million) in the General
Fund as well as Home and Community Based Services in the Tobacco Fund.
$2.9 million has been provided in the
Persons with Disabilities appropriation to provide services to an additional
405 persons.
$3.7 million will provide Attendant Care to
an additional 595 individuals.
The Human Services Development fund received
$35 million, an additional $1.3 million over the Governor’s February budget
proposal. The additional $1.3 million in
State funds will be used to offset the loss of Intergovernmental transfer (IGT)
funds.
COLAS
The final budget provides for a 3% COLA for
the following:
1) MH/MR
2) Early Intervention
3) Services to persons with Disabilities
4) Attendant Care
5) Women’s Services
6) Counties other than
7) Residential services for the mentally
retarded in Lansdowne area
8) Childcare services, including cash grants
9) Domestic
Violence
10) Rape
Crisis
11) Breast
Cancer screening
12) Legal
Services
13) Homeless
Assistance
The final budget provides for a 2% COLA for the following:
1)
Services
purchased by counties for children and youth programs and for the care of
delinquent and dependent services
Income Maintenance
The amount appropriated
for Cash Grants in 2007-08 is significantly less than the amount available for
the current year. The reduction of
$202.8 million includes a $157 million decrease due to the transfer of child
care funding to the new child care assistance appropriation and $10 million due
to caseload reductions from the current year.