Summary of Governor Tom Wolf's State Budget for FY 2019-20
The 2019-20 Budget proposed by Governor Tom Wolf on February 5th totals $34.146 billion, a 2.79% or $927.36 million increase over the 2018-19 budget. The budget highlights continued investments in Pennsylvania’s workforce and education, opportunities in the agriculture industry, substance use disorder treatment, care for those with intellectual disabilities and for seniors, fair wages and no broad-based tax increase. The largest General Fund expenditures include PreK-12 Education (37.3%), Medical Assistance and Long-Term Living (21.6%), Other Health and Human Services (16.4%), Criminal Justice (7.7%), Higher Education (5.1%), Debt Service (3.5%), all other (8.4%).
The state’s largest general fund revenue generators are Personal Income Tax (41%), Sales and Use Tax (32.4%), Corporate Net Income Tax (9.7%), Gross Receipts Tax (3.3%), Cigarette Tax (3%), Non-Tax Revenues (1.5%), and other taxes (9.1%).
The state’s total budget is $85.8 billion. In addition to the $34.1 billion in general funds, Pennsylvania receives funding from the federal government ($29.6 billion), fees ($4.6 billion), motor license ($2.9 billion), lottery ($2 billion), and other sources ($12.6 billion).
In order to generate revenue to pay for FY 2019-20 services and programs, Governor Wolf has proposed a natural gas severance tax plan as separate legislation from the budget. This severance tax would raise rates to 9.1-cents per thousand cubic feet of natural gas when the price of gas is below $3 and 15.7-cents when the price of gas is $6 or more. Using 2018 gas production and price estimates, the tax would generate an estimated $550 million in additional revenue. Wolf has proposed a severance tax in all four of his previous budget plans, but none have passed.
As in past budgets, Governor Wolf laid out a plan to raise the state’s minimum wage. Wolf continues to argue a minimum wage increase will deliver fiscal benefits to the Commonwealth, in addition to increasing the household income of some Pennsylvanians. Wolf’s budget banks $120.2 million in additional combined personal income and sales and use tax revenue due to the wage hike. The administration also claims that with Pennsylvanians earning more, some will be able to stop participating in human service programs, which state officials say could save $36 million in Medicaid costs next year and $119 million the following year.
Below are CAAP’s highlights from the proposed budget.
Building the Nation’s Strongest Workforce:
Workforce Command Center
- The Statewide Workforce, Education and Accountability Program (SWEAP) will include a command center to align workforce efforts across commonwealth agencies and partners
Establishing Parent Pathways
- The Parent Pathways initiative will provide wraparound support to parents pursuing college or other postsecondary training options
- Pilot programs may include support for housing, child care, family programming, tutoring, college system navigation, and career counseling
Expanding Home Visiting
- Expand evidence-based home-visiting services to vulnerable families in order to support pregnant women and at-risk infants, toddlers and their mothers
Expanding Access to High-Rated Child Care
- Pennsylvania’s Child Care Works program provides financial support for child care to families with income below 200 percent of the Federal Poverty Income Guideline
Lowering the Compulsory Age of School Attendance
- The 2019-20 budget proposes to lower Pennsylvania’s compulsory age of school attendance from the current requirement of 8 years to 6 years
PA TeacherWORKS: Connecting Teachers with the Workplace
- PA TeacherWORKS will enhance initiatives that connect educators and school staff to workplace experiences within Pennsylvania businesses to appropriately align student curriculum and career counseling
Attracting and Retaining the Best Teachers for Our Kids
- The 2019-20 budget proposes to increase the minimum starting salary to $45,000 per year to better align with competitive salaries and the increasing cost of living
Raising the Dropout Age
- The budget plan proposes to raise the minimum exit or dropout age for compulsory school attendance from the current requirement of 17 years old to 18 years old
Providing Community College Tuition Assistance
- An investment of $8 million through PA Community College Tuition Assistance will target the middle-skills gap and create the Educate and Stay in PA Program
- The program will award one-time grants of $2,500 to individuals who are students of or have graduated from a Pennsylvania community college and are currently working in the state
Establishing the Military Family Education Program
- The 2019-20 budget includes $2.7 million to establish a PA National Guard Military Family Education Program that will allow National Guard service members to earn higher education credit for their families
Continuing Investments in Education and Career Training
- The 2019-20 budget builds on previous increases to provide additional funding to improve education opportunities and further ensure students are workforce-ready
- The new investments include:
- $200 million increase in Basic Education Funding
- $50 million increase in Special Education Funding. Of which $300,000 will be used to enable children with serious illnesses or injuries to attend class via telepresence technologies
- A $7 million, or 1.5%, increase for the Pennsylvania State System of Higher Education to continue aligning its policy priorities and operations for student affordability and success
Making Pennsylvania a Better Place for Workers and Businesses:
Increasing the Minimum Wage
- This budget proposes an increase in the minimum wage from $7.25 to $12 per hour effective July 1, 2019, with $0.50 increases annually until the minimum wage reaches $15 per hour on July 1, 2025
Increasing Investments in Job Creation
- An additional $5 million for PA First - a comprehensive program established by the FY 2018-19 budget that offers grants for job creation and retention, infrastructure projects, and workforce development
- Additional funding will provide flexibility to rapidly respond to companies’ needs in order to increase investment and enable Pennsylvania to be more competitive with other states
Protecting the Most Vulnerable:
Ensuring the Best Care for Those with Intellectual Disabilities
- Initiative to increase services for individuals with intellectual disabilities and autism
- Investment to expand community service capacity for those on the emergency waiting list and with unanticipated emergencies
Continuing to Fight the Opioid Epidemic
- Ensure that individuals suffering from substance use disorder have access to meaningful treatment and can recover.
- Includes an additional $1.5 million for naloxone, a lifesaving medication that can treat narcotic overdoses in emergency situations
- Proposed strategies will balance a coordinated approach from state agencies with data and historical experience to deploy resources effectively and efficiently
For more information on the Governor’s Budget, click here.
Following governor Wolf’s budget proposal, the Department of Health (DOH) and Department of Human Services (DHS) detailed their budget breakdowns for the 2019-2020 fiscal year. This year, DOH budget proposal totals $194.7 million and DHS’ budget totals $12.99 billion.
One of DOH’s focus for this year’s budget is a continued investment to fight the Opioid epidemic. In 2018, DOH created the Opioid Command Center which develops and runs rescue, prevention, and treatment activities. Some of their 2018 outcomes include:
- Developing and revising 11 prescribing guidelines
- Decreasing dispensation through the prescription drug monitoring program (PDMP) by 25%
- Making naloxone available to first responders and Pennsylvania citizens
- Awarding 8 grants for PacMAT (medication-assisted treatment program)
- Developing and implementing real-time surveillance for neonatal abstinence syndrome among birthing facilities
With their 2019 budget, DOH will continue to fund the efforts mentioned above. Additionally, DOH will host 8 “warm handoff summits for treatment” in March and April, and improve opioid overdose surveillance and reporting.
DHS Secretary Teresa Miller emphasized overcoming employment barriers in her budget proposal. To address challenges many low-income families face, like child care or transportation, DHS is bolstering their EARN and Work Ready programs to better accommodate clients. DHS is also currently developing educational programs for low-income single parents who want to pursue post-secondary education.
A large portion of the DHS’ budget proposal invests in child care, with a focus on increasing infrastructure so more children and toddlers can receive critical support during those important early developmental years. Specific budget allocations include:
- $5 million invested to create pathways for parents to attend a higher education program
- $15 million in federal funding to reduce the child care subsidy waiting list and enable access to quality child care for 970 infants and toddlers
- $5 million in state funds, and $1.8 million in federal funds, resulting in a 3% rate increase in Early Intervention Programs
- $10 million in federal funds to provide a 28% increase for infant and toddler reimbursement rates for STAR 2, 3, and 4 child care providers
- $2 million in federal funds to support apprenticeships for infant and toddler teachers to achieve Associates degrees
- $5 million in state funds for an additional 800 family home visiting services
Other areas of DHS investment include expanding services for intellectually disabled individuals, individuals in personal care homes, Pennsylvanians with disabilities, and mental health services. Funding for these services include:
- $15 million to serve 765 individuals on ODP’s emergency waitlist and 100 people experiencing unanticipated emergencies
- $2.6 million in state funds for residential and day-treatment programs
- $2 million to provide support for medical assistance disability advocacy program
- $2.813 million to support Community Hospital Integration Projects Program