Overview of the Governor's 2014-15 Budget
Charts & Infographics on 2014-15 Budget
PBPC's Media Statement
Governor Tom Corbett proposed a 2014-15
state General Fund budget that would spend $29.4 billion, $927 million, or
3.3%, more than the current fiscal year.
also shifts $70 million in unused current year funding to pay for other
needs this year and counts on $250 million in lapsed prior year funding.
budget projects a $216 million year-end balance in 2013-14 to carry over
into the new fiscal year, although that cushion may disappear if revenue
collections fall short of estimate. (They are already $41 million below
projections through January.)
There are few
revenue changes in the 2014-15 plan, and budgeters are counting on
optimistic revenue growth to balance the budget. Here are some of the
- The plan is built on stronger tax revenue growth in
2014-15 (3.9%) than in 2013-14 (2%). Sizable growth is predicted for a
number of taxes, including personal income tax (5.5%), sales tax
(3.4%), realty transfer tax (14.4%), and bank taxes (9.2%).
- The capital stock and franchise tax remains on
schedule to be reduced in 2015 and fully eliminated in 2016.
- Total corporate tax collections are predicted to
decline for a second straight year, with continued annual declined
expected through 2017-18.
- $150 million would be raised by changing the timing
on when unclaimed property may be claimed by the state.
- $75 million would be generated by land leases for
gas drilling in state forests and parkland. The last leases were
signed in 2008, when a moratorium went into effect.
- Funding for the basic education subsidy would
remain unchanged at $5.5 billion.
- $241 million would be combined with the existing
$100 million accountability block grant to create the new Ready to Learn
block grant for public schools. The program would have four tiers of
school districts depending on school performance profiles. 72% of
schools would be in the top two tiers. School districts would be
permitted to spend money allocated through the block grant on existing
programs funded by the Accountability Block Grant, but new funding
would be limited to a restricted list of expenditures. The block grant
would fund curriculum development and training to support early
literacy and STEM education and extended learning opportunities in
grades K-3, with additional options for tier 3 and tier 4 school
- Special education, which has been flat funded at
$1.027 billion for the past six years, would get a $20 million
- Pre-K Counts would get a $10 million increase to
provide early learning opportunities to an additional 1,670 children.
- Funding for the state’s higher education
institutions (including Penn State, the other state-related
universities, and the State System of Higher Education) remains flat,
maintaining deep cuts in effect since 2011-12.
- The plan includes $25 million for new “Ready to
Succeed Scholarships” offered through the Pennsylvania Higher
Education Assistance Agency (PHEAA). The merit-based scholarships
would be targeted to families with incomes up to $110,000 and would
require legislation to create.
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- The plan relies on far-from-certain pension changes
that would save the state and its 500 school districts a combined $300
million. Savings generated will be paid for by unspecified pension
- The Governor’s budget also relies on a one-time
transfer of $225 million from the tobacco settlement fund (cash
reserves and private equity investments) to the Public School
Employees Retirement System. Tobacco settlement funds typically
support health care programs.
- Reduction in pension collars will mean less of the
pension debt is paid off each year. While this reduces expenditures
for the state, it increases the cost of repaying the pension
liabilities in the long term.
Health Care and Human Services
- The budget incorporates the Governor's Healthy PA
plan. Rather than adopting an expansion of Medicaid under the Affordable
Care Act, the Governor proposed a plan that would reduce health
benefits for current and new Medicaid enrollees and allow the state to
use federal Medicaid expansion funding to enroll newly eligible
individuals on the health insurance exchanges. The budget includes
$125 million in savings from the reduced benefit package. The plan
requires federal approval, which is uncertain.
- The total Department of Public Welfare (DPW) budget
will increase by $428 million, or 3.9%. The proposed budget replaces $340
million in federal funds due to a decline in the state's federal
matching rate for the Medicaid program.
- The DPW budget includes a number of one-time funds
and transfers, including $394 million in delayed payments to Medicaid
Managed Care providers, $130 million in Long-Term Care funding
transferred from the Lottery Fund, and $62.5 million directed from the
Tobacco Settlement Fund to nursing homes.
- The budget expands Home and Community-based
Services for seniors and people with disabilities by $51 million,
increasing slots in Long-Term Care Managed Care, Attendant Care,
Services to People with Disabilities, and the ID Community Waiver
- The budget increases the Child Care Services Line,
using $15 million in additional federal funds to reduce the waiting
list. The Child Care Assistance appropriation, which pays for child
care for Temporary Assistance to Needy Families (TANF) recipients, is
level funded but declines by $15.3 million as a result of reduced
- Services for victims of sexual assault receive a
- Family Centers, Nurse Family Partnerships, the
Human Services Development Block Grant, and Legal Services are all
- $5.3 million is sought in the Department of State
budget to advertise and publish three proposed Constitutional
Amendments (there was no description of what these amendments entail).
- The cost of running state prisons increases by $78
million, to more than $2 billion in 2014-15. This represents an
increase of 4%. The prison population is expected to drop by
approximately 1,000 inmates in 2014-15. The state’s cost to
incarcerate an individual climbs to $41,100 per year.
- More of the cost of running state forests and parks
has been shifted from the General Fund onto the Oil & Gas Lease
Fund (which collects royalties from wells on state land). The Oil
& Gas Lease Fund now provides over $4 for each $1 the General Fund
provides to the Department of Conservation and Natural Resources.
- The Department of Environmental Protection receives
a General Fund increase of $10 million, or 8%. This is due to an
anticipated loss of federal funding.
will have more detailed budget analysis later in today. View
additional resources at our web site.
Pennsylvania Budget and Policy Center is a non-partisan policy research project
that provides independent, credible analysis on state tax, budget and related
policy matters, with attention to the impact of current or proposed policies
on working families.
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