19 minute read
BUDGET BREAKDOWN
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The plan includes money for public schools, a sweet college athlete deal and savings stored away for later.
GOV. TOM WOLF
signed Pennsylvania’s new $39.8 billion state budget into law on June 30 and it was historic on many fronts. It came as the state transitioned out of the COVID-19 pandemic and was the first full-year budget approved by lawmakers since 2019. Lawmakers had a trove of federal funds to work with, thanks to a massive infusion of cash from President Joe Biden’s American Rescue Plan, which delivered nearly $7.3 billion in state aid to the Commonwealth.
The budget includes significant investments in education funding; it stashed away billions for future budget budget cycles and it divvied out a portion of federal COVID-19 funds. But it has been both praised and criticized for what it contains and what it leaves out.
So, what exactly is in the 2021-22 state budget? Here’s everything you need to know.
EDUCATION
Perhaps no subject has gotten more attention this budget cycle than education. Wolf, in his annual, albeit unconventional, budget address, called for massive funding increases in education, underwritten by an increase in the state’s personal income tax rate. Wolf wanted to run that funding – $1.15 billion – through the so-called Fair Funding Formula, which distributes new education money through a weighted, needbased system.
But even with an influx of federal dollars from the American Rescue Plan, Wolf did not get the $1.15 billion ask that he sought. Still, this year’s budget includes record levels of new investment in public schools. Here’s a breakdown: $300 million for basic education; $30 million for early childhood education; and $50 million for special education.
“This budget includes the largest education funding increase in the history of this Commonwealth,” Wolf said. “That is a $416 million increase in our investment in high-quality education in every community across the Commonwealth. It shows every student that we care about their education and we care about their future.”
The budget also allocates $100 million to a new “Level Up” initiative that will direct resources to 100 of the state’s poorest school districts. The provision was authored by Allentown-area state Rep. Mike Schlossberg, a Democrat, who said the Level Up program will move the state one step closer to equitably funding public school districts.
“A fundamental tenet of any educational system should be that a student can get a world class education regardless of where they live. We have historically
– Gov. Tom Wolf
failed to meet that challenge,” Schlossberg said. “Our Fair Funding Formula does remarkable work in alleviating those differences.” The budget for this fiscal year also expands the state’s Educational Improvement Tax Credit (EITC) Program, which allows businesses to receive tax credits of up to $750,000 per year if they provide financial contributions to fund scholarships for public and private schools. Under budget-enacting legislation passed by lawmakers, the annual tax credit cap for the program has been increased from $185 million to $225 million, which proponents say will increase the number of school choice scholarships students can use to attend private schools. Charles Mitchell, president and CEO of the Commonwealth Foundation, a conservative think tank, said in a statement that the budget includes “the biggest expansion since the inception of the program two decades ago.” “With a historic $40 million increase in the cap on donations, the EITC has nearly tripled in size under the Wolf administration, despite his resistance, growing from $60 million at the beginning of his administration in 2015 to $175 million today,” Mitchell said. Expansion of the program came despite efforts from Senate Republicans to increase its funding from $185 million to $300 million. That legislation, Senate Bill 1, would have also expanded the cap on the Opportunity Scholarship Tax Credit (OSTC) Program from $55 million to $100 million. That
The $1.1 billion from the American Rescue Plan will go toward the following:
$377
MILLION for pandemic response efforts
$282
MILLION for long-term living programs
$279
MILLION for infrastructure improvements
$50
MILLION for higher education
$50
MILLION for affordable housing
measure has not advanced out of the state Senate.
SAVE IT FOR A ‘RAINY DAY’
The largest question looming over budget negotiations this year was how the state’s latest round of federal COVID-19 aid would be used. Since the bill was signed into law by President Joe Biden in March, there have been plenty of ideas floated for how to use the $7.3 billion the state received from the American Rescue Plan.
Democrats in the state House wanted to use $4 billion of the federal funds for direct assistance to businesses, infrastructure investments and property tax relief, while Senate Democrats similarly wanted to use $6 billion to aid struggling businesses, increase access to childcare and remediate school buildings.
But while Democrats had a laundry list of possible uses for the federal dollars, only $1.1 billion was allocated through this year’s budget – with the rest being stashed away for future needs. The budget also directs the entirety of the state’s budget surplus – $2.52 billion – into the state’s Rainy Day Fund.
With more than $5 billion in ARP funds being pushed into the future, the Republicans’ fiscal restraint angered many Democrats who felt the budget surplus should have been used to help Pennsylvanians hit hardest by the COVID-19 pandemic.
“Where is the help? I thought folks in this place wanted to lower property taxes. I thought folks in this place wanted to keep small businesses and restaurants thriving. But here we are on budget evening and we have not held up our responsibility,” House Democratic Leader Joanna McClinton said during budget debates in June. McClinton urged her colleagues to address issues such as school funding, raising the minimum wage and access to broadband when lawmakers return in the fall.
But Republican leaders who negotiated the budget with Wolf said their reluctance to use the federal aid all in one year was a result of wanting to avoid mistakes made in past budget cycles.
Pat Browne, the state Senate Appropriations Committee chair, said conservative use of the federal funds is necessary to avoid budget deficits that occurred after the 2008 financial crisis.
“We do not want to empty the piggy bank and place the financial security of the Commonwealth in jeopardy when federal support is no longer available to us several
– State Sen. Pat Browne
years from now, as it was for us 2008 through 2010,” he said. “We saw significant financial challenges when the American Recovery and Reinvestment Act ended in 2011, which left the Commonwealth facing deficits for nearly a decade.”
“If we do not plan accordingly to manage long-term fiscal imbalance and use a larger percentage of the federal pandemic funding, we will experience the same financial problems we saw 10 years ago.”
With $1.1 billion in ARP dollars being distributed in this year’s budget, lawmakers will have more than $5 billion to use in the coming years – a sum that could make budgeting easier, though it’s also likely to stoke further debate over the best ways to allocate the funds in the year ahead.
ELECTION AUDIT FUNDING? NOT SO FAST.
Pennsylvania’s election laws have been under a national spotlight ever since the 2020 presidential election. Results trickled in late, and counties struggled to count and process mail-in ballots. The state was a constant target of former President Donald Trump and his allies, who challenged election procedures in court and made unsubstantiated claims about the election being fraudulent.
Ever since, Republican lawmakers have made re-writing the state’s election laws a top priority of this legislative session. Wolf, however, has stood in the way of GOP plans to reform the state’s Election Code. In June, he vetoed a bill that would have mandated voters show ID each time they go to the polls and require county election voters to verify the authenticity of signatures on mail and absentee ballots.
But even as that GOP attempt to overhaul the state’s election laws faced an uphill climb to get Wolf’s signature, Republican lawmakers nearly scored a victory when they placed money for election audits in this year’s budget. The state spending plan originally included an additional $3.1 million for Pennsylvania Auditor General Timothy DeFoor’s office, which was to be used for the creation of a Bureau of Election Audits.
House Speaker Bryan Cutler, a Republican who sponsored separate legislation to create the bureau, told City & State in June that the proposal would have tasked an independent office with conducting audits, rather than having the Department of State continue to conduct audits of the elections it oversees.
“The idea that you’ve got the executive branch, who runs the election, also auditing the election, I don’t think that that’s necessarily a true check and balance,” Cutler said. “I think the best way to do it is to move it outside to the auditor general, like we do with every other governmental program.”
While the budget package included additional funding for the auditor general’s office to create the Bureau of Election Audits, it did not include Cutler’s language to set parameters for how the bureau operates.
A spokesperson for Cutler told City & State that the speaker’s office did not believe language was needed to authorize the auditor general to conduct election audits. “The Auditor General has the authority to perform his duties as he sees fit. He certainly has the authority to audit our election processes and systems, just as the previous occupant of his office did,” Mike Straub, a Cutler spokesman, said.
Wolf used his line-item veto power to reject the funding increase, fearing it would be used to “relitigate” the 2020 presidential election amid calls from Trump and other Republicans to audit the results.
Although Wolf quashed the funding set aside for election audits, Pennsylvania Republicans are still weighing whether or not to commence a retroactive audit of the 2020 election. According to an AP report, Senate Republicans met for a private briefing on the possibility of investigating last year’s election, led by state Sen. Doug Mastriano, a Trump ally.
CODE BILL CHANGES
The state budget is never just line items and funding allocations – it also includes a raft of policy changes that are stuffed into so-called “code bills,” which serve as legislative guidelines for how various funds should be used.
Included in this year’s Public School Code bill was a provision that now allows college athletes in Pennsylvania to make money off of activities that utilize their name, image, or likeness. That change means that student athletes can cash in on the use of their name or other identifying factors on sports jerseys, in video games
Villanova’s Collin Gillespie is one of many college athletes cashing in on their name, image or likeness.
or on trading cards.
State Sen. Scott Martin, chair of the Senate Education Committee, said the provision will put Pennsylvania schools on a level playing field when it comes to recruiting. “This is critical for collegiate athletic programs in Pennsylvania so they will not be put at a competitive recruiting disadvantage after July 1, as many states will be implementing enabling rules,” he said.
This year’s code bills included a number of other major policy changes, including the repeal of a major regulation that would have expanded overtime eligibility for Pennsylvania workers.
The overtime expansion was sought by the Wolf administration, which said last year that the regulation would have resulted in new overtime eligibility for more than 80,000 workers. Wolf nearly traded the overtime rule for a minimum wage increase in 2019, but the bill died in the House and the governor continued to move the overtime expansion through the regulatory process.
According to an AP report, repealing the overtime rule was part of a trade to secure the $100 million needed for the “Level Up” initiative that will drive out funds to the state’s poorest schools.
Multiple new tax breaks were also created under this year’s budget, including breaks for flight simulators and a sales and use tax exemption for the purchase of computer equipment to be used at a state-certified computer data center.
Additionally, the state’s Independent Fiscal Office will now be required to conduct dynamic scoring of all proposed legislation that will have an impact on taxpayers of $50 million or greater. Under the provision, the IFO will be required to provide analyses that take into account the behavioral responses of taxpayers and other potential impacts from the legislation. ■
A holistic approach to health
nearly 4% in the same period.
Serving older adults goes beyond just health care, and with people living longer, more active lives, the demand for services is only going to increase. Homebound seniors may need assistance with getting food and medication, accessing home care and social services, and learning how to use technology and avoid isolation. Others may need help paying rent or utilities, or need additional capacity; improving services for older adults; enhancing efforts to supply a sense of community for older adults; emphasizing a citizen-first, diverse culture; and advocating for the rights and protecting older adults from abuse and exploitation.
As need grows, so does the demand for more resources. Torres said regardless of future funding, the state has to use technology and evidence-based programming to
After COVID-19, Pennsylvania has to better serve its growing elderly population.
By Harrison Cann
PENNSYLVANIA IS
getting older quickly. By 2030, when baby boomers will be 65 or older, seniors will outnumber children 18 and under for the first time in history.
It’s no secret the state struggled during the pandemic to control COVID-19 outbreaks in nursing homes and long-term care facilities. Issues like staffing shortages and a lack of resources, which existed before the pandemic, were exacerbated by the grim conditions.
The question is: with services failing to meet the current population’s needs, and the population only getting older, how can the state prepare for what’s ahead?
“The reality is that society tends to treat older adults as an afterthought,” Adam Marles, president and CEO of the trade association LeadingAge PA, told City & State. “I think (the pandemic) shined a light on how much work there is to do to make sure that older adults have what they need to not be isolated, and to make sure that they are still thought of as contributing critical components of our communities.”
Currently, one in four Pennsylvanians is over 60. That number is expected to reach 4 million, about one-third of the state’s population, by 2030. Those 85 and older are expected to grow steadily, as well. According to the Independent Fiscal Office’s five-year outlook, Pennsylvania’s retiree cohort grew by 3.3% over the last five years, and is expected to grow by 2.6% in the next five years. The elderly cohort, including those 80 years and older, is expected to grow by mental or physical therapy in a post-pandemic world.
The state’s Department of Aging, led by Secretary Robert Torres, must develop a State Plan on Aging to provide a vision for the next few years. The department’s most recent plan outlines five goals Commonwealth agencies will pursue. They include strengthening the aging network’s increase efficiency and capacity. “Whether we get more support or not, we must continue to improve data collection and analytics in order to be more efficient and build our capacity,” Torres told City & State. “(The population’s) also becoming more diverse, so one of my priorities is to make sure that we’re being effective in our outreach to diverse communities, meaning there’s not
a one-size-fits-all method.”
Torres and advocates agreed that a person-centered approach to health care is required going forward. Being proactive and pushing preventative medicine now can prevent emergencies and other problems in the future, he said.
The pandemic revealed the urgency for a holistic approach to health, and that socioeconomic status and lifestyle choices play a major role in health outcomes.
Workers in nursing homes want higher wages and a people-centered approach to health care.
But just to start, advocates and workers in the industry say they need to be provided the most basic necessities to properly serve their communities.
“Everything that we went through during the pandemic has always been there. COVID exposed the ugly truth and the monster that was already in the closet,” Tisheia Frazier, certified nursing assistant (CNA) at the Saunders House outside Philadelphia, told City & State. “Nursing homes were like the Titanic. In the movie, when the boat was sinking, they told the band to keep playing while people were out there dying.”
The Saunders House is one of 12 nursing homes that voted in June to authorize strikes. Frazier said current contract negotiations with the facility have been focused on not only improving wages, but also providing better health care and other benefits like tuition reimbursement. Those are two important factors in both attracting and retaining a quality workforce. As it stands now, she said, the options given to workers are nowhere near where they need to be.
“It’s the most dangerous work in the country right now,” Matthew Yarnell, president of SEIU Healthcare Pennsylvania, told City & State. “A workforce that is largely impoverished – this chronic, low wage-high turnover workforce – is ultimately bad for care.”
According to Yarnell, there are more than 234,000 direct care workers in the state. The existing shortage, which he blames on low wages, minimum training and high emotional and physical demands, creates obstacles for access to quality services and the continuity of care necessary to improve health outcomes.
SEIU, which represents workers at more than 100 of the Commonwealth’s 700 nursing homes, was requesting a $250 million investment to the bedside, what Yarnell called a “down payment toward equality.”
Marles and LeadingAge PA, which represents more than 380 senior service providers across the state, was looking for $450 million, including $396 million for nursing homes. He said nursing homes receive funding through medical assistance, Medicare and Medicaid, and private and long-term care insurance. While Medicare pays these properties enough to continue operating effectively and generate some margin, medical assistance underfunds homes by about $45 per person per day. With resources lacking in numerous areas, resources will have to be allocated toward specific purposes to ensure workers are paid well and homes are properly reimbursed.
Roughly $282 million of this year’s budget will use American Rescue Plan dollars for nursing homes and long-term care support, with about $250 million toward staffing and bedside care. Yarnell said the investment was a long-time coming, but that it doesn’t go far enough to address both short-term and long-term staffing needs.
The $282 million allocation in the state budget also includes $30 million for personal care homes and assisted living facilities and $5 million for grants to develop indoor air management practices,
– Tisheia Frazier, a certified nursing assistant at the Saunders House outside Philadelphia
as well as funding to provide home and community-based services to 501 more seniors.
Yarnell said increased funding could get CNA minimum wages up to $17 an hour, and licensed practical nurse wages up to $25 an hour. With one worker caring for up to 20 residents during the day, and up to 40 residents overnight, he said a lot more must be done to get homes to “humane staffing levels.”
“If you’re taking care of someone who’s completely dependent and needs care for toileting, bathing, mobility and eating – you name it – that is totally not the appropriate level of care we ought to be giving Pennsylvania seniors,” he said.
Yarnell says the new investments don’t necessarily mean workers at those 12 homes won’t take matters into their own hands. Contract negotiations are continuing with the relief funds in mind, and a potential strike is among the last things workers want to do to get what they want.
“We’re not being greedy … we’re just asking for the basic fundamentals every health care worker should have,” Frazier said.
The state has a long way to go if it wants to fully address the issues older adults are facing, and will continue to face. Agencies and advocates may disagree on what exactly should be done, but they can agree that breaking down silos between providers will be crucial in treating people as a whole.
“We need to make sure that the attention and collaborative spirit on lawmakers’ behalf continues, but we’re moving in the right direction,” Marles said.
Torres stressed that improving efficiency and capacity is a necessary step, but that creating partnerships and working collaboratively will help the state, as well.
“There are a lot of things, whether it’s affordable housing, prescriptions and food, or mental health and addressing trauma, that we need to make sure we’re providing for older adults and keeping them healthy with good, evidence-based programs,” Torres said. “I want to make sure that we’re being very effective in our reach to diverse communities, to LGBT older adults and that we’re being responsive and working with trusted partners.”
One of the first decisions made by the state Department of Aging will be how it will spend the $59.3 million it received from the American Rescue Plan. Although the department has three years to allocate the funds, Torres said much of it will go to area agencies on aging (AAAs) to help them develop individualized plans. Across the board, he said, their focus moving forward is to align services across all industries to focus on the population’s growing list of needs.
“I want to tell the story, at the end of the three years, that this money helped achieve these outcomes, and that the demand for services is only going to increase,” Torres said.
The pandemic deepened what was already a massive hole in the area of nursing and long-term care. Coming out of all this, it’s up to the state to dig itself out before it’s buried. ■
