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Tags Posts tagged with "PA governor budget"

PA governor budget

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Governor Josh Shapiro delivered his 2025/26 budget address to a joint session of the General Assembly at the State Capitol in Harrisburg. The Governor’s $51B budget plan seeks more money for underfunded public schools and public transit in his budget proposal unveiled Tuesday, while he is also hoping to win support for legalizing marijuana and introducing taxes on skill games viewed as competitors to casinos and lottery contests.

A key factor is that the Pennsylvania revenue for the fiscal year has flattened out, and without the American Recovery Act surplus and the Rainy Day Fund, expenditures related to “cost to carry”; that is inflation, are not projected to be met. Once those sources are used, they are gone, but the legislature could decide to spend an additional billion or two of General Fund revenue on an infusion into the Rainy Day Fund. While the legalization of marijuana and regulation of skill games could address some of this, both sources have unpredictable revenue returns.

The Governor’s proposed budget priorities align with several of the RCPA strategies as outlined in the 2025 Legislative and Administrative Priorities.

What was not clear were the defined spending pathways or line item allocations. RCPA is hoping that the DHS Budget Address on Friday from Secretary Dr. Val Arkoosh will provide clarification on the human services budget. It should be noted that at this point, while we understand the governor’s priorities, details are not yet apparent. In fact, many of the areas related to RCPA members have more questions than answers and will evolve as the discussion continues between the administration and the legislature.

Behavioral Health
As an example, one area of concern is that the Medicaid Behavioral Health Capitation system experienced a shortfall of several hundred million dollars in the current fiscal year. There are significant dollars noted in the various spreadsheets related to the capitation, but again the detail is not there. In one document, it is noted that “In total, over $2.5 billion is needed to meet actuarially sound rates in the remainder of the 2024/2025 fiscal year and into the 2025/2026 budget year.” Is it solely to replenish lost dollars for the primary contractors? What is the breakdown between behavioral health and physical health? RCPA will be looking for more clarity.

Legalization of adult-use recreational marijuana is a priority for the governor, who is estimating more than $500M in revenue in 2025/26. None of that revenue is projected to be shared, however, with the Department of Drug and Alcohol Programs.

The proposed budget would also expand existing loan forgiveness initiatives, to incentivize more health care providers and behavioral health specialists to take jobs all across Pennsylvania.

Intellectual and Developmental Disabilities
Additionally, there is no apparent delineation of funding for IDD services, and while it has a line item placeholder indicating a $175M increase, it remains unclear if this is new or previously allocated funds from last year’s budget. Or simply the cost of maintaining current programs but not new individuals or services.

School-Based MH Funding
Governor Shapiro is again proposing Physical Security and Mental Health funding in the FY 2025/26 budget, proposing $100M in funding to school districts across the Commonwealth. This proposal is flat funding from FY 2024/25 and, if enacted, new investments in school safety and mental health will total approximately $350M in the governor’s term to date.

County Funding
$20M is proposed in continued additional investment for county mental health based services funding. This would represent a total new investment of $60M over three years. While this marks the third year of increased funding to the counties, it remains far short of the needed investment for these critical services. It has been reported that there is the need to invest nearly a billion dollars to level set the current county based mental health system.

Early Intervention
Early Intervention will see a proposed increase after a year of no rate adjustments. OCDEL did complete a rate methodology study in 2024, but it is unclear regarding the impacts of the study on the new proposed budget. The overall proposed funding for Early Intervention Part C represents an increase over FY 2024/25 of $16M (+3.5%), including $10M to provide a rate increase for early intervention providers in Part C, birth to age three programming.

Other DHS Related Human Services Funding Areas:

  • $10M in dedicated funding to support the 9-8-8 hotline network.
  • $5.75M to expand discharge and diversion programs for individuals with mental illness in the
  • criminal justice system.
  • $4.8M to provide reentrants with MA services and continuous eligibility after incarceration. This is a component of the recently approved Section 1115 CMS Waiver, Keystones of Health.
  • $5M to continue funding for walk-in mental health crisis stabilization centers supporting multiple counties.

DHS Budget Briefing Friday, February 7, 2025
Secretary Val Arkoosh and leadership from the Department of Human Services (DHS) will host a webinar to discuss the proposed 2025/26 budget for the department. The briefing will take place at 10:00 am on Friday, February 7. If you are unable to attend, the briefing will be recorded and available for viewing afterwards on DHS’ YouTube channel.

Use this link to register for the briefing. All who plan to attend must register individually. A link for the webinar will be sent Thursday evening. DHS encourages submission of questions ahead of the briefing so they can prepare as much information as possible. They will follow up on any questions that are not answered during the webinar.

(If the registration link above does not work, please try copying this link directly into your browser: https://forms.office.com/Pages/ResponsePage.aspx?id=QSiOQSgB1U2bbEf8Wpob3tuk6VNEbjZIvvnDA4XOB-dUNVlFUVRMQUVBMzhPWVpRNjNFODQ1OUlaTy4u)

RCPA will continue to update members as further details develop on the proposed budget, including information on specific policy areas. If you have additional questions, please contact your respective RCPA policy director.