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| CORRECTION: In the original version of this Bulletin sent February 12, it should have been clarified that the decrease in the line for the Center for Local Government Services reflects a transfer of funds to another agency, not a proposed cut. The corrected analysis is below under Community and Economic Development. We apologize for the error.
GOVERNOR RELEASES FY 2016-2017 BUDGET
On Tuesday, Feb. 9, Governor Wolf delivered his second budget address, announcing his $32.7 billion fiscal proposal for FY 2016-2017 before a joint session of the House and Senate. This special e-edition of the Legislative Bulletin outlines the proposal and an analysis of the proposed funding for county line items.
The Governor's proposal also includes supplemental funding for FY 2015-2016 to bring the total current year budget to $30.5 billion, reflecting the "framework" budget that had been under consideration between the General Assembly and Gov. Wolf at one point during December's negotiations. The FY 2016-2017 proposal would be about a ten percent increase over the full FY 2015-2016 approved by the General Assembly in HB 1460 (before the partial veto exercised by Gov. Wolf), and an almost eight percent increase compared to the FY 2015-2016 budget with proposed supplemental appropriations. The Governor indicated that these numbers are driven by about $1.6 billion in mandated spending increases related to debt obligations, corrections, human services and pension payments, the need to address the structural deficit estimated by the Governor at about $2 billion across the current and coming fiscal years.
This proposal includes $2.72 billion in new and increased taxes for FY 2016-2017, including an increase in the personal income tax (3.07 to 3.4 percent), as well as an expanded base for the sales and use tax and new and increased taxes on tobacco taxes. The Governor also proposed a 6.5 percent severance tax, which would keep the current impact fee under Act 13 of 2012 in place and allow natural gas companies to use the amount paid in impact fees as a credit against the severance tax. One of CCAP's top priorities for 2016 remains maintenance of the shale gas impact fee, complete and as it is now regardless of any severance tax proposals, with the ability to grow as the industry grows and with the same distribution to impacted local governments and additional current distributions to all counties through the Legacy Fund and to conservation districts and state agencies.
These tax revenues are proposed to address the state's structural deficit and the mandated spending increases, as well as provide an additional $500 million in funding to school districts and another $120 million in other spending increases. The Governor's proposal does not include a school property tax relief initiative as his first budget proposal did.
For counties, highlights of the overall FY 2016-2017 proposal continue to include a three-year phased restoration of the ten percent aggregate cut to seven line items in FY 2012-2013, which, while part of the Human Services Block Grant, impact core services across all 67 counties. The Governor included a $28 million (
3.3 percent) supplemental appropriation for FY 2015-2016 that is intended to be the first year of the restoration, and an additional funding increase for FY 2016-2017 budget for what would be the second year if the supplemental FY 2015-2016 appropriation were enacted. This plan is consistent with counties'
priority on human services funding. The priority also calls for expansion of the block grant beyond the current 30 counties; Gov. Wolf did not propose an expansion.
CCAP has assembled a number of budget resources on its
commonwealth budget web page, including a spreadsheet with the Governor's proposed funding levels for county line items. It also includes links to budget resources from the Governor and legislative caucuses. Highlights on line items of interest to counties follow.
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AGRICULTURE AND THE ENVIRONMENT
The Governor proposed a $2 million increase for the State Food Purchase Program, while county fairs are proposed at $4 million. The Agricultural College Land Scrip Fund, which includes revenues for the Penn State Extension program, is proposed to receive $50.1 million; this Fund was line item vetoed to zero for FY 2015-2016 under HB 1460 and so the program has not received state funding during the current fiscal year. Also, the State Farmland Preservation Board is meeting mid-February to set the 2016 state funding threshold for farmland preservation and will be recommending a $31 million threshold, a slight increase from the $30 million threshold set in 2015.
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ALCOHOL, TOBACCO AND OTHER DRUGS
The Governor's FY 2016-2017 proposal calls for continuation of the $5 million increase in drug and alcohol base funds received for FY 2015-2016 under HB 1460. The proposal also includes some $34 million dollars to be available for expanding services to address the overdose crisis; CCAP has identified $17 million in Behavioral Health (BHSI) funds that are proposed to create 50 health homes to provide medication-assisted treatment and wraparound services. In his departmental briefing, Department of Human Services Secretary Ted Dallas indicated these funds would be matched by federal funds, administered through the physical health Managed Care Organizations; providers will be selected through a request for proposals. The proposal would license 25 facilities under the Department of Drug and Alcohol Programs, to be operational by July 1, 2017.
Funding levels for Act 152 services are contained in the outpatient Medical Assistance line item, but the allocation was not available at press time. Intermediate punishment programs are proposed to increase by $2 million, and an additional $300,000 is recommended for expansion of treatment courts. Tobacco Prevention and Cessation funding is proposed at the same level as the 2015-2016 fiscal year.
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CHILD WELFARE
The child welfare budget is not clear at this point, due in large part to the rebalancing initiative and the fact that the Fiscal Code language to authorize rebalancing has yet to be enacted for FY 2015-2016. At this point, the combined state and federal appropriation for FY 2015-2016 is about $1.3 billion, a decrease of around nine percent; however, this is the first year in which "rebalancing" was contemplated. The legislature is intending that some $166 million will be appropriated in FY 2016-2017 to go toward reconciling the fourth quarter invoices for FY 2015-2016, for a total of $1.54 billion for FY 2015-2016. The Governor's proposed FY 2016-2017 budget for child welfare is $1.576 billion, which is purportedly representative of the $166 million needed to reconcile the FY 2015-2016 expenses and rolls forward 12.5 percent of the determined needs for FY 2016-2017 to be paid in FY 2017-2018, continuing to implement rebalancing going forward.
The Governor's proposal for FY 2016-2017 includes an increase of $25.6 million for increases in the needs based budgets, an additional $6.4 million to continue current programming, and $1.46 million to begin to restore cuts from FY 2012-2013. This would be a total increase of $33.4 million, or about two percent, for child welfare. In addition, the proposed budget for Family Centers includes a $10 million initiative for home visiting for at-risk infants and toddlers.
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COMMUNITY AND ECONOMIC DEVELOPMENT
The Governor's budget proposal calls for a modest increase for the Center for Local Government Services; the aggregate decrease shown in this line reflects only a transfer of funds for fire services for the city of Harrisburg to the Department of General Services, at the city's request. In addition, the Municipal Assistance Program, which funds shared service, community planning and flood plain management activities for local governments, is set to be level funded at $642,000. The PA First program, focused on investment and job creation in Pennsylvania, is proposed to receive a supple-mental appropriation for FY 2015-2016 of $14 million to bring that line to $34 million in the current fiscal year, with a proposed FY 2016-2017 funding level of $45 million. The line item funding tourism marketing is recommended to receive a slight in-crease, bringing the total to $4.2 million, and funding for tourism to attract businesses sees a proposed $944,000 supplemental for FY 2015-2016 for a total of almost $3 million this fiscal year, and a little more than $3 million total for FY 2016-2017. The Governor has also proposed a 20 percent increase for the Office of Open Records for FY 2016-2017.
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HOMELESS ASSISTANCE PROGRAM
Funding to provide temporary shelter to homeless individuals and rental assistance to those in danger of becoming homeless is proposed to receive a supplemental FY 2015-2016 appropriation of almost $1.7 million, representing the first year of a three-year restoration of the FY 2012-2013 cuts. The Governor also proposed an additional $685,000 for FY 2016-2017 for the second year of that three-year restoration.
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HUMAN SERVICES DEVELOPMENT FUND
HSDF is proposed to be funded at nearly $14.5 million for FY 2016-2017, which includes a supplemental FY 2015-2016 appropriation of $499,000 and an additional FY 2016-2017 appropriation of $499,000, representing the first two years of a pro-posed three-year restoration of the FY 2012-2013 cut.
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JUDICIARY
The Governor's budget request generally maintains levels of funding from the enacted FY 2015-2016 budget in HB 1460 for most judicial line items that impact counties, including court cost reimbursement. However, adult probation is slated for an 11 per-cent increase up to $19.5 million, and intermediate punishment treatment programs are proposed to receive a 20 percent increase to $20.2 million. Juvenile probation is recommended for level funding at $18.9 million. The grants provided to counties for each judicial position had been funded at $63,000 per position for several years, but for FY 2015-2016, those funds have been sent to counties at the customary $70,000 per position rate. A new line item first adopted in the FY 2015-2016 budget provides grants to counties to meet mandates for assuring access to those with limited English proficiency, which is proposed to continue at the same $1.5 million level for FY 2016-2017. These grants are intended to enhance compliance and do not supplant other dollars counties must commit for language interpretation.
There is no direct allocation for the district attorney salary reimbursement, but concurrent with budget action in 2009, a permanent court fee surcharge was imposed to raise funds for the commonwealth share and the reimbursement is gradually catching up.
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JUVENILE JUSTICE
Funding levels for juvenile detention and delinquency alternative programs are unavailable at press time, and the Department of Human Services will provide a breakdown of the specific funding levels within the next few weeks. |
LIBRARIES
In the Department of Education, the public library subsidy is proposed to receive a two percent increase to $55.6 million. |
LONG-TERM CARE
As in previous years, the long-term care appropriation in the budget is split into three areas - home and community-based services, long-term care managed care, and long-term care which includes funding for nursing homes. Once again, additional funding sources such as the Lottery Fund, Tobacco Settlement, and nursing home assessment are being utilized to help support the funding levels for long-term care, as is the Intergovernmental Transfer (IGT) for the first time in years.
For nursing homes, the projected long-term care state funding for FY 2016-2017 of $1.096 billion shows a seven percent increase compared to the allocation for FY 2015-2016, and even though tobacco funds decrease slightly, there is still proposed to be an overall increase in funding for long-term care. The Governor's executive budget further indicates that money has been set aside for a Medicaid rate increase for nursing facilities, but it is unclear at this time what that increase will be. In FY 2016-2017, relief from the county share requirement for nursing homes will be provided by the IGT, as will additional supplemental funding for county facilities, which shows a slight increase from FY 2015-2016 allocations. Proposed supplemental FY 2015-2016 funds and additional increases for FY 2016-2017 bring state funding for home- and community-based services to $312.1 million (including lottery funds of $105.7 million), which, combined with federal funds of $452.5 million, represent a significant increase for FY 2016-2017. In addition, long-term care managed care (the LIFE program) is proposed at about $282.2 million in state and federal funds for FY 2016-2017; this is a small increase from the enacted FY 2015-2016 budget. |
MEDICAL ASSISTANCE TRANSPORTATION PROGRAM
The Governor's FY 2016-2017 budget includes an increase of $2.8 million in state funds from the enacted FY 2015-2016, up to almost $65.5 million. When combined with federal match funds of $79.5 million the total funding increase for MATP is nearly six percent. |
MENTAL HEALTH AND INTELLECTUAL DISABILITIES, EARLY INTERVENTION AND AUTISM
The proposed budget contains an overall increase in funding for FY 2016-2017 that will help offset the ten percent cut in human services allocations that occurred in FY 2012-2013. The Governor had proposed as part of his FY 2015-2016 budget a three-year restoration of that cut, and this proposal includes supplemental funds for FY 2015-2016 plan and a funding increase in FY 2016-2017 to cover years one and two of the restoration.
Overall, FY 2016-2017 funding levels for mental health services are proposed to see six percent increase over enacted FY 2015-2016 levels, gaining $58 million in both state and federal funds. As noted above, the state-funded Behavioral Health initiative would see a $23 million increase over enacted FY 2015-2016 levels, including a $17 million initiative to combat the heroin epidemic. Funding for private intermediate care facilities is proposed to decrease by $12 million in combined state and federal funds in FY 2016-2017, due primarily to the ongoing effort to transition individuals from facility-based care to community-based care. Community base funding for intellectual disabilities is proposed to increase by five percent over enacted FY 2015-2016 levels, including $5 million in supplemental funding for FY 2015-2016, while the intellectual disability waiver program shows a $137 million proposed increase in FY 2016-2017, which includes $9 million in FY 2015-2016 supplemental funds. These funds also include services and supports for 75 individuals transferring from state centers to the community, 250 people on the waiting list, and 500 special education graduates. Funding for early intervention is proposed to remain flat, and funding for autism services is proposed to receive a $2 million increase in state funding and $4 million increase in federal funds to allow 100 additional adults to be served. |
HUMAN SERVICES BLOCK GRANT
The proposal includes supplemental funding for FY 2015-2016 for a first-year restoration of FY 2012-2013 cuts to these seven lines, which impact funding for all 67 counties in these programs. Further, the proposal contains increases representing the second year of the restoration for FY 2016-2017. However, the Governor did not include counties' priority on expansion of the block grant to any willing county beyond the 30 counties now in the program. |
TRANSPORTATION
Act 89 of 2013 has been providing overall increases in funding for roads, bridges, transit systems and other infrastructure, with an estimated total of an additional $2.3 billion over a five-year period. The FY 2016-2017 budget proposal reflects the third year increases under the Act, including an extra $20 million for public transportation assistance. In addition, the lifted oil franchise tax cap, the county and forestry bridge millage totals $21.6 million. Those funds, along with the special $5 million bridge allocation retained from Act 44, are distributed based on relative square footage of county-owned bridges. |
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