As has been widely reported in statewide media outlets, the House and Senate successfully passed pension reform this week. Although the pension reform measure has little direct financial impact on the 2017-2018 budget, it is expected to shift risk from public employers to individuals through greater use of defined contribution plans by employees in the future. Another bi-partisan, five party achievement helps build good will which may help budget negotiations move along.

 

Some attention will shift back to negotiating the state budget next week as the Senate is expected to hold caucus meetings to determine what they want to achieve in the state's annual spending plan. The House previously sent them a spending plan, HB 218, in early April. That bill included cuts to some human services programs, and a small increase for high quality Pre-k of $25 million but no 2-1-1 funding. 

 

All sides continue to express optimism about an on-time budget, although there are also some unexpected conversations about a need to increase revenue to achieve a balanced spending plan. With next year being an election year, and a projected deficit that will grow significantly each year for the next several, there are members on both sides of the aisle who are studying a potential need for revenue. The House passed a gambling expansion plan which faces an uncertain future in the Senate. The Governor is advocating for closing tax loopholes. The Senate will likely be assessing revenue options as they meet next week, too. 

 

United Way of PA will gather information from our contacts and start issuing more frequent updates to membership when there is more to report. We have already laid some groundwork to educate freshman members about the negative impacts of a budget impasse based on our survey data from 2014-2015's late budget, and have highlighted the importance of an on-time budget in a communication about our budget priorities which was sent to the whole House and Senate Appropriations committee earlier this year. 

Recently, the Council for a Strong America, a national, bipartisan nonprofit uniting five organizations comprised of law enforcement leaders, retired admirals and generals, business executives, pastors, and prominent coaches and athletes, released a report highlighting how Pre-K is the key the boosting school success and cutting prison costs in Pennsylvania. 

The report goes into depth on the societal benefits that Pennsylvania and our country can see with investments into early childhood education. Providing at-risk kids with high quality early learning programs will contribute to less crime and incarceration in the future. Not only is this better for our children, it saves our state money in the long run.  In fact, for every disadvantaged child that participates in a high-quality pre-k program, there is an average "profit" of more than $29,000 to society for each child served.  Governor Wolf proposed a $75 million investment into Pre-K and Head Start programs for the 2017-18 budget, which would give 8,400 children the opportunity to attend a Pre-K program.  If that investment goes through, and based on the cost-figure presented in the report on realized profit, Pennsylvania could have a return of more than $244 million over the lifetime of the 8,400 children being helped.  

The report goes on to further identify other areas children benefit from when they have the opportunity to attend an early learning program, such as fewer high school dropouts and less behavioral issues.  The information is presented nicely and we encourage you to share this report with your community partners to show the positive impacts of Pre-K investments. 
 

Read more about the benefits of Pre-K investment in the report.