Budget 2009/10: Questions & Answers

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Why does Gov. Rendell hate libraries? He cut funding for PA libraries in his first budget. Funding increased over the years to where in 2008 it was just a hair above the last Tom Ridge line item and the Governor and Budget Office touted it as

I don’t speak for the Governor, but it’s a pretty safe bet to say he doesn’t hate libraries. As you pointed out, under Gov. Rendell, funding for libraries reached an all time high in 2008/09 of $75.5 million. The library subsidy supports more than 600 library facilities and 29 district library centers across the commonwealth. The Governor’s proposed budget reduces funding by 2.3 percent, dropping it back to $74 million. As with all of the Governor’s proposed cuts, we will look carefully at the numbers. However, I must caution you the financial situation is such that we will have to make difficult choices this year.

Is it your understanding that the federal stimulus package has reduced the deficit that the Governor described earlier this year? Or did the budget that the Governor put forward already assume the federal money that we are receiving? Ed Schwartz, Philadelphia

The Governor’s proposed budget assumes the revenue shortfall will be $2.3 billion in the current fiscal year and $3.9 billion in fiscal year 2009/10. The Governor’s proposal bridges that gap using a combination of federal stimulus money ($1.03 billion this year; $2.4 billion next year); fund transfers (for example, money from the Rainy Day Fund); targeted tax increases; and cuts. Even with the infusion of more than $3.4 billion dollars in stimulus money to the general fund, our deficit over the next two years more than $6 billion. We still must find ways to raise revenues and cut programs.

The chart below is helpful.

Since we are in an economic crisis, why can’t each representative and senator set an example by cutting their expenses by 10 percent or more and returning the cost of living increase? Richard Barr, Pine Grove

How much money will be cut from all of the legislative caucus’ to help balance the budget? Joseph Matyus, Masontown

As in an individual legislator, I returned my cost of living increase and encouraged others to do so as well. In addition, I am working with House Democrat leaders to reduce the expenses in our caucus. We notified the Governor that our caucus is committed to reducing costs by a minimum of 4.2 percent, which he asked us to do.

There should not be any tax increases in the budget. Many of us are already struggling to make ends meet. Government should do the same in living within their means without taking more of taxpayers’ money during a difficult economic time. Please confirm that there are no tax increases in the new state budget for 2009/10? Ellie Ponti, Steelton

The Governor’s proposed 2009/10 budget does not call for any general tax increases. However, the Governor has proposed targeted increases, including a tax on smokeless tobacco, a 10 cent increase in the cigarette tax, and a tax on the extraction of natural gas from the Marcellus Shale gas reserves.

Why is the budget not reflecting a reduction in our legislative bodies? Why is this not being considered when it is so essential and that is what the voters want? Susan Parker, Glenshaw

When will we have a smaller legislative body? Irving Krasnopoler, Pittsburgh

The size of the legislature is set by the state’s constitution. The current number of seats, 203 in the House and 50 in the Senate, was determined by Pennsylvania citizens during the last Constitutional Convention held in 1967-68. In the House, each member represents approximately 65,000 Pennsylvanians.

In order to change the size of the legislature, Pennsylvanians would have to amend the state Constitution. There are two ways to do that. The first would require a bill calling for a reduction in the number of legislators to be passed by two consecutive sessions of the legislature. If that occurs, a referendum could then be placed on the ballot in the election that follows. Keep in mind each legislative session lasts two years, so this process for amending the state Constitution takes roughly five years at a minimum.

The second way to reduce the size of the legislature is for delegates to a Constitutional Convention to support such a change. That, too, would have to be voted on by our citizens.

As a teacher in the state system, I am very interested in the Governor's plan for consolidation of school districts. I do believe he is on the right track of what we need here in PA. Can you give any further information than has been reported? Jeffrey Kovaleski Dickson City

If you look at Governor Rendell's budget address, you'll find that he puts forth the idea of consolidating school districts, but offers no specific plan. Instead, he is asking for funding in the 2009/10 budget so the state can create a legislative commission to prepare a set of recommendations for making consolidation happen. He proposed reducing the number of districts from 500 currently, to no more than 100. We'll update you at www.hacd.net as more information becomes available.

When the state passed the gambling law, proceeds were intended to be used explicitly for reduction of taxes to homeowners. I believe the state is into this money and using it for other purposes. Am I correct and if I am, where is it being used? Marian Szmyd, Jeannette

Gaming has generated almost $2.2 billion in direct revenue for property tax relief, economic development, revitalization of the horse racing industry, and support for local governments and initiatives. The distribution, according to the Gaming Board, is as follows:

• Property Tax Relief: $910.6 million. ($612.9 million for 2008-09 general property tax relief and $297.7 million over the past two years to provide additional rebates to older Pennsylvanians through the Property Tax/Rent Rebate program)
• Pennsylvania Race Horse Development Fund: $338.2 million
• Local communities: $174.9 million
• Property Tax Relief Reserve Fund: $150 million
• Pennsylvania Economic Development & Tourism Fund: $140.9 million
• Volunteer Fire Companies: $75 million in grants
• Forest Reserves: $25.4 million
• Local Law Enforcement Grants: $15 million
• Compulsive & Problem Gambling Treatment Fund: $6 million
• DCED grants to Counties for Administration of Homestead Exemptions: $ 3 million

Will it be necessary to use gambling to get money for college students? Renee Levine, Philadelphia

In his proposed budget, Governor Rendell put forth a plan to provide a dedicated stream of funding for college students by legalizing and taxing video poker machines. I support the concept of state government making more money available to those who want to pursue higher education opportunities. But I have two concerns about the Governor's proposal: I am not yet convinced the mechanism (taxing video machines) is appropriate. What's more, I'm not sure if the plan should be limited, as it is now, to only students going to community colleges and the state's 14 state-owned universities.

What changes are proposed if any, to the Educational Improvement Tax Credit program? Cindi McCall, Elizabeth

The proposed budget allocates $75 million for the Educational Improvement Tax Credit program. No changes are proposed by the administration.

When will the state get out of the retail liquor business? Kenneth Harper, Ridley Park

The question of turning the state stores over to private operators always seems to simmer on the back burner in Harrisburg. Former Gov. Tom Ridge pushed the hardest to privatize the stores but was unable to do so even though Republicans controlled both the state House and Senate during his term in office. Privatizing would provide a one-time infusion of cash to the state. On the other hand, the state stores provide a steady revenue to the general fund ($125 million in the current year), and employ approximately roughly 3,000 Pennsylvanians in good paying jobs with benefits. I think it's important to also point out that the stores have become more consumer-friendly with better hours, a wider selection and more knowledgeable staff.

• Do you have plans to restore the Governor's Schools? Anita Gordon, Pittsburgh
• [Will you] reconsider reinstating funding for museums and the PHMC grant program? Anne McCloskey, Loganton
• Are the state parks going to be affected? Barbara Lichtenwalner, Kutztown
• I beg of you to take a very long look [at] all the repercussion of closing the Scranton State School for the Deaf. Michele Cunningham, Scranton
• Will the Anthracite Heritage Museum in Scranton be closed? C. Warren Norton, Scranton
• Does the Governor's proposed budget eliminate state funding for PBS? Travis Ferry, Richfield

It's important to remember the Governor's proposed budget represents the beginning of a process that will take place over several months and include the House, Senate and public. At this point, everything is on the table. We'll be working very hard to determine what our priorities should be. As citizens, you've taken the first step by writing to the Appropriations Committee. I also encourage you to contact your individual representatives and members of standing committees who oversee areas in which you have a particular interest. I can assure you all of the cuts proposed by the Governor will be reviewed by the legislature. But I also want to be cautious. This is an extremely difficult budget year and, as I have said, every department and agency will have to make sacrifices, including the legislature.

I’m sick of paying taxes to support welfare people. Why don’t you just make them all get jobs?

DPW administers programs that range from services for toddlers with disabilities to nursing home care for seniors. These are our parents, grandparents, children and siblings. These are our friends and our neighbors. Consider that:

• More than half of DPW’s budget is for Medical Assistance (MA) which provides health care and long-term services to nearly two million of our poor, elderly, disabled, and chronically ill population. Nearly one out of every six Pennsylvanians is enrolled in MA. Although the elderly and disabled represent approximately one-third of all MA recipients, they account for more than two-thirds of the expenditures.
• One-fifth of DPW’s budget is for other programs that serve approximately 200,000 individuals with disabilities including mental retardation, autism, mental illness and physical disabilities.
• One-tenth of DPW’s budget is for County Child Welfare services that promote the safety and well-being of nearly 250,000 children or have been (or are at risk of) being abused or neglected.
• Less than three percent of the Department of Public Welfare’s budget is for cash grants to those whom you refer to as welfare people. Pennsylvania had only 200,256 cash grant recipients as of December 2008, a 25 percent decrease from October 2005.

I always hear about Pennsylvania's Rainy Day Fund. Can we just use that to fix the budget?

You are correct. Pennsylvania does have Rainy Day Fund or savings account. Right now, we have an estimated $750 million in that fund. I suspect we will use most or all of it in this current budget crisis. But that money won’t solve our problem because we're looking for an estimate $5 to $6 billion to fill the budget gap. Plus, it's important to remember the Rainy Day Fund is a short-term, one-time infusion of cash into the budget. Once that money is gone, it's gone. We need long term solutions if we’re to get through this crisis.

You told a previous writer we need long-term solutions, what do you mean?

By that I mean we have to have a serious conversation about how we want our state government to operate and about what services we want it to provide. My colleagues and I hear people tell us every day to cut the budget, but what they mean is for us to cut someone else’s program from the budget. We need priorities. We also need to begin thinking about such issues as merging school districts and local governments; we need to get serious about finding a solution to our transportation woes; and we need to be willing to make the tough decisions.

Do you have a question about the 2009/10 state budget?

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