The 2019/20 budget season is over and the Governor has signed HB 790, the 2019/2020 General Appropriations budget, and HB 33, which eliminates the General Assistance Fund, a welfare program that provides cash grants of about $200 to Pennsylvania’s poorest residents. Despite an intense dust up amongst members of the Senate, the budget process was relatively calm.

According to summaries from the House Republican and Democrat Appropriations Committees, the 2019/20 budget highlights include:

General Budget

The General Appropriations Budget spends $33.997 billion budget for FY 2019/20.

• That is an increase of $596 million or 1.8%;
• There are no new taxes or fees in this budget;
• The budget is $149 million less than Governor Wolf’s February budget proposal;
• The budget transfers an estimated $250 million into the state’s Rainy Day Fund.*
  *The Rainy Day Fund is essentially the state’s savings account and is utilized when the economy hits a downturn and revenue collections are weak. By saving money, this budget protects taxpayers from future tax increases.

Drug and Alcohol Programs

The proposed legislation provides level funding for assistance to drug and alcohol programs, which provides grants to single county authorities across the commonwealth to develop and implement substance abuse education, prevention, and treatment programs.

Funding for general government operations would increase by $793,000 – 42.5 percent – to bolster administrative resources needed to effectively implement state and federal programs, which mirrors Gov. Wolf’s request.

Outside of the department, the proposed legislation includes $1.5 million in new funding through the Pennsylvania Commission on Crime and Delinquency (PCCD) to supply additional doses of Naloxone to first responders.

Education

Basic education funding contains a $160 million increase in basic education funding through the fair funding formula, according to the latest information available. Comparatively, Gov. Wolf’s 2019/20 budget proposal called for a $166 million increase in formula-driven funds.

Special education funding includes a $50 million, or 4.4 percent, increase for special education funding, which was the amount requested by Gov. Wolf in February.

Early intervention funding, which provides funding for developmental support services for 3- to 5-year-olds, receives a $15 million increase for 2019/20 on top of a $14 million supplemental appropriation for 2018/19.

Early childhood education funding in Gov. Wolf’s 2019/20 budget proposed a $40 million increase for Pre-K Counts and a $10 million increase in Head Start Supplemental Assistance. The budget lowers these amounts to $25 million and $5 million, respectively.

The School Safety and Security Grant Program are being funded at $60 million. $45 million is coming from General Fund revenues and $15 million is from the courts.

The Public Library Subsidy will receive a $5 million, or 9.2 percent, increase is the first real state funding boost for libraries since drastic cuts in the wake of the Great Recession. However, the $59.5 million funding level for 2019/20 remains well below the $75.8 million peak in 2007/08.

The Educational Improvement Tax Credit (EITC) will receive $25 million in additional funding.

Health

The proposed budget legislation includes funding to the Department of Health that is largely in line with the governor’s request. It also offers several additional, targeted increases to specific programs.  The budget, at a minimum, would restore funding for all disease line-items that the governor had proposed to eliminate.

Human Services

The budget provides $12.7 billion in state General Funds to the Department of Human Services, a $97.3 million increase from the revised 2018/19 budget that counted a supplemental appropriation increase of $650.5 million.

• The proposed 2018/19 supplemental increase includes $200 million to backfill the funding gap created in Medical Assistance-capitation when the court blocked the transfer from the Pennsylvania Professional Liability Joint Underwriting Association (JUA) The transfer was anticipated by June 30, 2019.

• The administration has appealed the court’s decision and the proposed budget assumes the JUA transfer will occur in 2019/20. Consequently, the 2019/20 appropriation for Medical Assistance-capitation is predicated on the success of this appeal and transfer of $200 million to help pay program expenditures.

The proposed legislation would fully restore funding for hospitals and medical centers to the physician practice plan and academic medical centers appropriations in line with the prior year funding amounts.

Funding for existing long term living waiver programs continues to shift to Community HealthChoices – the statewide managed care program for seniors and individuals with physical disabilities – as the program becomes active statewide. The final phase of implementation will occur on Jan. 1, 2020, to add the remaining regional zones, including Lehigh/Capital, Northwest, and Northeast alongside the Southwest (implemented Jan. 1, 2018) and Southeast (implemented Jan. 1, 2019).

• The budget offers $12 million, a 2 percent rate increase, for personal assistance services provided by direct care workers. The proposed increase is across long-term living appropriations including: home and community-based services, services to persons with disabilities, attendant care, and Community HealthChoices.

Intellectual Disabilities and Autism funding in the current budget supports several important initiatives directed to Pennsylvanians with intellectual disabilities and autism spectrum disorder. State funds totaling $15.003 million (with $15.309 million in federal matching funds) would provide services to an additional 865 individuals currently on the emergency waiting list that now counts 5,306 individuals. Of this total, $10.959 million would be used to place 765 people in the community living waiver while $4.044 million would be used to place 100 people on the consolidated waiver.

Mental Health Service funding will have an additional $26.3 million which includes funds to provide home and community-based services for 45 individuals currently residing in state hospitals.

Children and Youth funding in the budget reflects an increased use of federal block grants funds to significantly reduce state spending on child-care services and child-care assistance. Federal block grants will also be used to fund new initiatives for the coming fiscal year.

The waiting list for child-care services currently stands at 4,700. The proposed budget includes an additional $15 million in federal funds to remove 970 infants from the waiting list. The proposal would also utilize $9.986 million in federal funds to increase the reimbursement rates to STARS 2, 3, and 4 providers.

An additional $5 million in state funding would be spent on community-based family centers, providing access to evidence-based home visiting services to 800 more Pennsylvania families, bringing total spending to $18.558 million.

Labor and Industry

A minimum wage increase was contained in Gov. Wolf’s February budget address. The Governor’s proposal would have raised the minimum wage to $12/hour effective July 1, 2019, followed by 50 cent increases annually until 2025, when the minimum wage would reach $15/hour. House and Senate Republicans rejected the governor’s proposal to increase the minimum wage, and the final budget plan does not assume or include any change to the minimum wage.

The Office of Vocational Rehabilitation will receive a $2.3 million increase; however, the increase will likely not offset declining federal funds, creating pressure on OVR’s ability to provide services to Pennsylvanians with disabilities seeking employment during the coming fiscal year. Along with a number of cost containment strategies, OVR plans to close the “order of selection,” which creates a waiting list for services.

The Centers for Independent Living would receive a 2.0 percent increase.

Health and Human Service Code Bill

Senate Bill 695 prevents the Department from entering a contract with a broker until an analysis of non-emergency medical transportation and other human services transportation programs has been completed (See pages 3 and 4); provides for an analysis of a uniform statewide preferred drug list; and extends the Nursing Facility assessment and the Intermediate Care Facilities for Persons with an Intellectual Disability.

Questions, contact RCPA Director of Government Affairs Jack Phillips.