FY 2015-2016 Budget

Unifying the voice of nonprofits to leverage their power

FY 2015-2016 Budget

Governor Tom Wolf proposed his 2015 budget on March 3, 2015. It includes changes to education; taxation of corporations, gas, property, income, and sales; transportation, manufacturing; healthcare; liquor sales; pensions; and government spending. Specific items are listed below and can be downloaded here as a pdf.

On May 27, GPNP held its Annual State Budget Briefing with Budget Secretary Randy Albright, Senate Minority Leader Jay Costa (D-Allegheny), Representative Brian Ellis (R-Butler), Hillman Family Foundations President David Roger, and Forbes Funds President Kate Dewey. A summary of the event -- including the Power Point slides, press clips, and Twitter conversation -- is available here.

On June 27, the Pennsylvania House of Representatives passed its own budget plan, which was later passed by the Pennsylvania Senate. The Pennsylvania Budget and Policy Center published fact sheets comparing the two plans by their impact on each legislative district. Click here to view their analysis. 

It was widely expected that this year's final budget would be delayed past the June 30 deadline. In response, GPNP issued the press release available here and below:

GPNP to Nonprofits: Prepare for a State Budget Delay

PITTSBURGH, PA., June 29, 2015 – With a delayed state budget expected, the Greater Pittsburgh Nonprofit Partnership urged nonprofit organizations to prepare financially for the delay.

“Nonprofit organizations that receive state funding need a quality budget to be passed on time,” said Greater Pittsburgh Nonprofit Partnership Advisory Team Chair John Lydon. “Governor Tom Wolf and the General Assembly are ultimately responsible for working together on the budget, and we appreciate their ongoing hard work. However, organizations that improve the quality of life in Pennsylvania and serve our most vulnerable populations cannot plan for the next fiscal year without a budget. We have called upon the Governor and the General Assembly to ensure that our members can continue providing our vital services by passing a budget that meets Pennsylvanians’ needs before the deadline.”

“With only two days left until the state budget deadline, a likely budget delay is very concerning,” said Greater Pittsburgh Nonprofit Partnership Executive Director Samantha Balbier. “Nonprofit organizations that receive state money should take precautionary measures in order to avoid disruptions and damage as a result of a delay. Key tactics may include delaying purchases and new hires, creating a financial scenario plan, as well as consulting with banks and funders. It is also essential for nonprofit leaders, staff, and even clients to call their legislators and let them know how a late budget would impact their services. As House Majority Caucus Administrator Brian Ellis (R-Butler) told our members at our Annual State Budget Briefing, personal and authentic stories make a difference -- and now is the time for legislators to hear what risks a late budget can pose.”

The Forbes Funds has prepared a list of six key steps for nonprofits bracing for a delayed budget. The list is available at: https://forbesfunds.org/files/GPNP%20Documents/BudgetImpasse.pdf

In addition, The Forbes Funds has worked with Bridgeway Capital to create a short-term lending fund for nonprofit organizations negatively affected by a state budget delay. Half of nonprofit respondents to a recent survey by The Forbes Funds noted that access to additional short-term credit would be valuable to their organization during a state budget delay. To receive details on this new short-term lending option, please contact us at info@forbesfunds.org

GPNP's and The Forbes Funds' comments were carried in The Pittsburgh Business TimesThe Morning CallNewsworks, and WESA

As expected, Governor Tom Wolf vetoed the Republicans' budget proposal on June 30, 2015, leaving Pennsylvania without a budget. Negotiations are continuing to resolve the impasse, but if it drags on, both Dewey and Goughler believe that nonprofits will begin to feel an impact from the delay beginning in August. 

Further, GPNP was not alone in urging nonprofits to prepare for a delayed state budget. Senate Minority Leader Jay Costa (D-Allegheny) said in reference to GPNP's Annual Budget Briefing:

With respect to nonprofit organizations Secretary Alright, myself, and a few other House and Senate members participated in the GPNP annual budget meeting and the message that was delivered not only by the leaders of the organizations but also by us is that [nonprofits] should be contemplating a backup plan with respect to how they’re going to provide their services and how they’re going to pay their employees. In fact there is a mechanism in the Pittsburgh region … that I know of that [nonprofits] can avail themselves to an organization that will lend them the proceeds to be able to do that. We encourage people to do that in the event that there is a stalemate on the budget that they should look to do that.

Click here to view the video of Senator Costa from The Patriot-News.

On July 17, GPNP called on all of Harrisburg to end the budget impasse. GPNP's release is available below and here as a pdf.

Time to Resolve the Budget Impasse

PITTSBURGH, Pa., July 17, 2015 - The Greater Pittsburgh Nonprofit Partnership (GPNP) and the Pennsylvania Association of Nonprofit Organizations (PANO) remind lawmakers that a budget impasse impacts Pennsylvania residents.

“Holding discussions cannot wait for the hundreds of thousands of Southwestern PA residents -- including 200,000 in Allegheny County -- served by the region’s human service nonprofit organizations suggested in this week’s press by Harrisburg ‘observers.’ Now is the time for lawmakers to problem solve and compromise,” says Samantha Balbier, executive director of GPNP. 

Anne Gingerich, Executive Director of PANO agrees: "We are asking all of Harrisburg and the residents of the Commonwealth to act now to continue our investment in the sector that sustains jobs and benefits to all of us every day."

Critical human services such as those that support abused and neglected children will begin to feel the impact when state payments stop the second week of August.

“Every day, hundreds of the most vulnerable people in our communities call United Way’s 2-1-1 helpline seeking assistance with basic needs like food, shelter, transportation and keeping their utilities on.  Sadly, the effects of the budget impasse will be most detrimental to the children, adults, seniors and families who are most in need of help,” said Julie DeSeyn, vice president, Community Impact, United Way of Allegheny County.

The critical needs pipeline of $33.25 million dollars per month in human service funds will begin to be blocked in Allegheny County next month.  “We are talking about basic needs, kids in foster care, adoption services, funding that supports treatment for the severely mentally ill, delinquent kids, substance abuse addiction, supportive housing and afterschool programming,” said Balbier.  “It is the job of the legislature and this administration to work on passing a budget for the citizens of this state.  This is not the time to be going on vacation”, states Susan Rauscher, CEO of Catholic Charities of Pittsburgh and chair of the GPNP Public Policy Committee.

“This budget impasse can mean the difference between having basic needs and someone not having food to eat or a place to sleep.  This budget impasse will have ripple effects throughout our community – when one organization is impacted, we are all impacted,” said Sharon Wolf executive director of North Hills Community Outreach based in Allison Park.

“In addition to the disruption of services provided, interrupted cash flow can cause unemployment to a vital economic engine in our region,” said The Forbes Funds’ President, Kate Dewey. “Our research indicates that nonprofits operate on very thin margins, which leaves them very few options for dealing with the impasse. Nonprofits may have to cut services and reduce staff.  Allegheny County human service nonprofits roughly employ 46,000 jobs so this will have a significant domino effect in our economy and the well-being of our whole Commonwealth. Disrupting such a vital economic engine, even temporarily, will not bode well for this state’s growth or its image.”

The comments from the press release were carried in the Philadelphia InquirerPittsburgh Post-Gazette, the Pittsburgh Business Times, the Times-TribuneWITF, and the National Council of Nonprofits' Advocacy Matters newsletter. 

On July 23, the Conference of Allegheny Providers convened a press conference to emphasize the budget impasse's local impact. Life's Work President and CEO and GPNP Governance Committee Chair Everett McElveen introduced and moderated the discussion that featured former Senator Allen Kukovich, Family Services of Western Pennsylvania President and CEO Stephen Christian-Michaels, and CAP President Noreen Fredrick. The Pittsburgh Post-Gazette covered the press conference, and additional Information about it is available here. Photos are available on GPNP's Facebook page.

The same day, GPNP Executive Director Samantha Balbier participated in an exclusive meeting convened by Governor Wolf's Administration to discuss Pennsylvania's budget impasse with human services organizations and coalitions from across Pennsylvania. Senator Vince Hughes (D-Montgomery/Philadelphia), Representative Dan Frankel (D-Allegheny), Special Assistant to the Governor Mike Brunelle, and Pennsylvania Budget Office Director of Legislative Affairs and Communications Anne Belloga participated in the meeting. Attendees and the larger human services sector were asked to support the Governor's vision for long-term solutions. GPNP has reached out to Governor Wolf -- who was not in attendance -- to convey the long-term damage a budget impasse creates in human services. 

Additionally, Balbier and The Forbes Funds' Vice President Matt Zieger spoke with the Associated Press about nonprofit organizations having to borrow money to make it through the impasse:

County and social service agency officials say a continuing impasse is sure to impact their services, in particular by creating service delays and longer waiting lists.

'These are people who are in crisis who are not getting services,' said Samantha Balbier, executive director of the Greater Pittsburgh Nonprofit Partnership.

In 2009, many social service agencies laid off employees, borrowed money or shut down during a budget impasse that lasted into October under then-Gov. Ed Rendell.

The last payments to social services providers went out earlier in July, meaning that the first missed payment would be in August if the impasse continues, according to officials from the Pittsburgh-based Forbes Funds, a group that supports the nonprofit sector.

Through Wednesday, $312 million in payments had been held up because of the impasse, according to the Wolf administration. The majority of that money, $218 million, is payments to counties for human services programs.

A low-interest loan program arranged by The Forbes Funds through Bridgeway Capital has received five applications, with more being filled out, said Matt Zieger, vice president of The Forbes Funds.

Still, nonprofits will get hit with a 'double whammy' of having to pay borrowing costs — or losing interest on reserves they spend — and then climbing out of a hole created by the missed payments, Balbier said.

It otherwise will be challenging for nonprofits to get a bank loan, Balbier and Zieger said.

'It's very difficult to convince a bank to lend you money if your funding has been frozen,' Balbier said. 'And the interest rate you would get on that loan is exorbitant because it's very high risk.'

On July 27, KDKA's Jon Delano spoke with House Majority Leader Dave Reed (R-Indiana) for a segment about the budget impasse. The video is available here, and an excerpt is below. According to KDKA:

As Pennsylvania enters its fourth week without a state budget, it’s only a matter of days before the hurt from the impasse will start to be felt locally.

'Really the human services agencies are the ones that will miss their payments first from a state government perspective,' PA Rep. Dave Reed told KDKA political editor Jon Delano on Monday. ...

County social service agencies are about to lose state money because a Democratic governor and a Republican legislature have, so far, failed to compromise to pass a budget.

Those affected services include mental health, behavioral health, child welfare, domestic violence and rape programs, homeless assistance, legal services, and certain hospital payments.

But that’s not the biggest hit.

'Then the schools come shortly thereafter,' warns Reed.

On July 31, Balbier spoke with KQV 1410 AM about the budget impasse. Audio is available here, and excerpts from the transcript are available below.

KQV: Some people say that in fact as part of the debate in Harrisburg in this budget impasse people are saying you know this is a drain on the budget all these welfare type of programs. These are things that should not be considered the core function of government and that these are things that are going to have to be pared back in order to balance the budget without tax increases. How do you respond to that?

BALBIER: Well I think that we need to focus on who we really are as Pennsylvanians and focus on what the needs of residents are in this commonwealth. You know right now we have two choices, a budget proposal that includes a partial restoration of human services funding approximately $26 million from the $84 million that was cut in the prior administration. On the other hand we have a budget that was vetoed by Governor Wolf that included a 2% reduction from prior year levels. That was a budget that contained less of a commitment to our most vulnerable in the commonwealth so clearly we have disagreement about the value of Human Services spending between the administration and legislature. But let me just remind you of what some of these services are and iterate these are services that cross all socioeconomic levels and I’m sure all of us have family or friends that have needed types of services. We’re talking about mental health, child abuse prevention, treatment or invention, child care so people can work, drug and alcohol treatment. This cut comes at a time when our communities are facing a national epidemic in opiate and heroin addiction. Services for the disabled, elderly, and veterans and a food security program. So really we're not talking about entitlement programs in the old fashioned way of thinking of that. What we’re talking about are real human needs in our state. ...

KQV: Earlier we were talking about the legislator and trying to impress upon some in the legislature the importance of nonprofits. It appears that your voice is not being heard quiet as loudly as some others in Harrisburg. Is there a problem in that regard your kinds of organizations getting your voice heard in Harrisburg?

BALBIER: Well you know that’s really the role of the Greater Pittsburgh Nonprofit Partnership as a southwestern regional coalition. We do have a state wide organization the Pennsylvania Association of Nonprofit Organizations. Were all working very hard to have our voices heard. But I think you become heard typically by people who value what you have to say and that’s the real question: Who hears us and what are they proposing to do to support the most vulnerable in Pennsylvania?

KQV: What you’re saying is if legislators do not like your message they’re not going to listen to it?

BALBIER: I think that’s unfortunately the case but I think what they can start to listen to is the costs incurred when these services aren’t provided. There’s going to be ripple effects in this community when folks with mental health issues aren’t being served, when kids who are abused and neglected aren’t being served, when people cannot get to work because child care subsidies are no longer available, when heroin addiction is taking over and we cannot get drug and alcohol treatment for a lot of people who need that important service. Then you really have to think about the disabled, the elderly, and the veterans.   

On August 13, Pennsylvania Department of Human Services Secretary Ted Dallas appeared at Hosanna House in Wilkinsburg to call for a resolution to the budget impasse. Representative Paul Costa (D-Allegheny), Representative Ed Gainey (D-Allegheny), and a number of GPNP members joined Secretary Dallas on stage. The Pittsburgh Post-Gazette reported:

… [T]he governor’s administration continued taking its case to the public with a Pittsburgh appearance by Ted Dallas, Department of Human Services secretary. He visited Hosanna House in Wilkinsburg, urging local service providers to contact their legislators and tell them to end the budget impasse.

He said the state doesn’t just need any budget; it needs one that ‘addresses and fully funds all the social services needs that we have,’ including food programs, early childhood education and more.

A woman in the audience, who says she works at several Pittsburgh-area schools, began crying when she spoke about a young student who got in serious trouble because he didn’t have food at home.

She said the boy skipped class to eat leftover scraps he could find in the cafeteria because he was hungry. The boy was caught, accused of stealing food and forced to appear before a judge. His mother had to take time off from work to bring him to court, which she couldn’t afford.

And now the boy has a criminal record, she said.

The numbers of those kinds of stories will escalate, Mr. Dallas said, if a budget that includes adequate funding for services like food stamps isn’t passed.

‘My hope is when we get this budget passed,’ he said, ‘we’ll have the resources we need to do this and those stories that you hear, you’ll hear a lot less of in the future.’

Photos from the event are available at GPNP’s Facebook page

On August 19, Governor Wolf called for the final budget to contain funds to reimburse certain nonprofits for the interest on loans borrowed to sustain services during the impasse. According to the Governor’s press release:

Governor Tom Wolf today announced his support for an appropriation to be included in a final budget to reimburse school districts and small nonprofits for the interest payments incurred on loans as a result of the budget impasse. … Under the governor’s proposal, a small nonprofit must be an independently owned and operated entity that employs 100 or fewer employees and cannot be a subsidiary or affiliate of either of a corporation or of a non-profit that employs more than 100 people. The small non-profit organization must have a contract or grant either directly with the commonwealth or with a county program that receives and passes through state grant funds to the non-profit (ex:  a mental health program under contract with a grant to a county) and the state program funding must provide more than 50% of the non-profit’s annual operating revenues.

On September 17, 2015, Greater Pittsburgh Nonprofit Partnership Advisory Team Chair John Lydon and GPNP Public Policy Committee Chair Susan Rauscher published the following opinion piece in the Pittsburgh Post-Gazette in response to the proposed stopgap budget.

End the Impasse in Harrisburg

By GPNP Advisory Team Chair John Lydon and GPNP Public Policy Committee Chair Susan Rauscher, Pittsburgh Post-Gazette, September 17, 2015

Pennsylvania should not emulate the mess in Washington; it's time to negotiate a final budget deal, not settle for stopgap measures

Pennsylvania’s budget impasse is creating unnecessary uncertainty for the commonwealth’s most vulnerable residents and the nonprofit service providers that keep them healthy and safe.

Why is this happening? Because Pennsylvania’s elected officials missed their constitutionally mandated June 30 deadline to approve an annual budget, leaving our constituents to wait for a resolution while the politicians cover up their constitutional irresponsibility with political rhetoric.

Hundreds of thousands of Pennsylvanians with critical, persistent needs are the first to feel the impact of a late budget. Child-abuse reports continue to pour in, mental health crises and substance abuse are on the rise, many Pennsylvanians remain hungry and without permanent housing, seniors need a helping hand to age in place with dignity, our collective responsibility to serve and support veterans endures, thousands of disabled people want to enter and remain in the workforce, domestic violence continues unabated. These problems should motivate our state leaders to negotiate vigorously and compromise respectfully to produce an annual budget.

Instead, a stopgap measure to provide financial relief to human services agencies and school districts while the final budget is negotiated was introduced Wednesday in the state Senate. This is progress of a sort, but a stopgap measure is no substitute for a final negotiated budget.

A stopgap measure may seem appealing. It would release state funds to support certain vital services, make money available to school districts and ease some of the impasse’s burden on nonprofit agencies that have been drawing on lines of credit to continue services. Some believe a stopgap measure would give service providers room to breathe as Gov. Tom Wolf and the Legislature continue to negotiate.

Perhaps, but it also would take the pressure off the governor and legislators to reach agreement on a final budget. If money starts to flow, will they remain at the negotiating table? Will their breathing room lead them away to other issues?

The federal government provides a clear example of the downside of stopgap funding. It has been funded by continuing resolution after continuing resolution for years. Important choices have been deferred without resolution, leaving any person or institution that receives federal funding – which is just about everybody – unable to make long-term plans.

Pennsylvanians shouldn’t be subjected to this. They are counting on our elected leaders to negotiate and compromise.

Some legislators have told us that a stopgap measure could reflect funding levels from the 2014-2015 fiscal year. But the legislative majority disagrees with the governor on 40 percent of the budget line items. Will these items be funded at 100 percent of the prior year level?

Both parties agree that additional funding will be needed to balance the budget. But how long will they ignore this issue with stopgap funding?

The difference between stopgap funding and the constitutionally mandated budget is uncertainty.

Nonprofits and local governments need predictable funding streams to efficiently execute the services for which government hires them, to properly mobilize financial resources and to fully participate in the economy by paying local vendors and keeping their taxpaying employees paid.

Nonprofits leverage state funding to attract other resources so they can expand their capacity, increase efficiencies and upgrade facilities and services. Without certainty in funding, these plans end up on hold indefinitely.

Resolving the state budget impasse will require negotiation, long-term thinking, pragmatism and compromise. Let’s get on with it; a stopgap will not do.

The Greater Pittsburgh Nonprofit Partnership will continue to advocate for a negotiated annual budget that provides essential funding for human services, education, community development and the other services that maintain and improve our commonwealth’s quality of life. The Pennsylvania Constitution got it right by mandating an annual on-time budget. It’s past time for the governor and Legislature to get it done.

John Lydon is CEO of Auberle, a Catholic faith-based nonprofit organization that helps troubled families and children, and chair of the Greater Pittsburgh Nonprofit Partnership’s Advisory Team. Susan Rauscher is executive director of Catholic Charities of the Diocese of Pittsburgh and chair of GPNP’s Public Policy Committee.

On September 24, Representative Dan Frankel (D-Allegheny) quoted GPNP's op-ed during his floor statement against the proposed stopgap budget. Video of his floor statement, as well as the text of the op-ed, follow below.

On October 5, GPNP and The Forbes Funds issued the press release below. The release is available to download here as a pdf. 

Data Shows Time is Up for the Governor and the Legislature 

To Pass a Final State Budget

PITTSBURGH, PA, October 5, 2015 - The Forbes Funds and Greater Pittsburgh Nonprofit Partnership have collected data from southwestern Pennsylvania nonprofits that demonstrates the immediate and urgent need for a final budget that provides essential funding for services to vulnerable Pennsylvanians.

Our region’s human service nonprofits are suffering cash flow problems and are taking on unnecessary debt to cover the costs of implementing existing state contracts.  The financial situation that Harrisburg has created by denying a structural budget deficit and failing to fix it with long-term cost-saving and revenue plans is now impacting hundreds of thousands of vulnerable Pennsylvanians. 

56% of human service and community development nonprofits surveyed are encountering severe cash flow problems as of October and escalating going forward. Even if organizations have contingency or reserve funds, they simply do not have the funds to endure an extended impasse to the end of the calendar year. The situation is forcing nonprofits to make decisions that will reduce staff hours, postpone payroll, and reduce services to Pennsylvanians.

“This situation has enormous consequences to everyone in our state”, according to Kate Dewey, President of the Forbes Funds. “The people in real need that our nonprofits serve are losing services that help meet their basic needs and security.  Not only are these people losing today, but this political chess game will result in higher service costs down the road that will affect everyone.  If this situation continues, Pennsylvania is sure to feel an economic and reputational impact on top of the great human impact we're already seeing today.”

Only a final budget that fixes our state financial situation for the long-term can provide certainty to the nonprofits that serve Pennsylvanians and create financial sustainability in our Commonwealth.  It’s time for the Governor and the Legislature to meet in the middle and accept the solutions that are needed.

“Look where we are today.  Years of balancing the budget through a “cuts only” approach was short-sighted and ineffective.  The Governor and the Legislature must tackle the budget complexities in front of them.  They must think long-term, make hard decisions, and invest in programs that reduce long-term costs”, states Samantha Balbier, Executive Director of the Greater Pittsburgh Nonprofit Partnership. “Long-term financial and human harm is being inflicted on this Commonwealth and its residents. Time is up for this debate”.

Forbes Funds / Greater Pittsburgh Nonprofit Partnership Survey Data:

Of 200 regional nonprofits surveyed, the following represents the information shared by the 43 respondents. 

When will your organization encounter serious cash flow problems as a result of the impasse?

* We have already encountered serious cash flow problems: 16.28%

* During September: 16.28%

* During October: 23.26%

* During November: 6.98%

* After November: 18.6%

* We will not encounter serious cash flow problems: 18.6%

What is the status of your organization’s contingency or reserve funds?

* We do not have significant contingency or reserve funds: 25.58%

* The funds will run out during September: 11.63%

* The funds will run out during October: 6.98%

* The funds will run out during November: 6.98%

* The funds will run out after November: 27.91%

* We will not need to utilize our contingency or reserve funds: 20.93%

Do you have a credit line?

* Yes: 81.4%

* No: 18.6%

If yes, how long until your credit line is fully used?

* Our credit line is already nearing full use: 14.71%

* During September: 5.88%

* During October: 14.71%

* During November: 11.76%

* After November: 52.94%

Which of these steps has your organization taken to date (as of September 1-8):

* Cutting administrative costs: 44.19%

* Reducing staff hours or postponing payroll: 13.95%

* Reducing services: 13.95%

* Temporarily stopping services: 2.33%

* None of these steps have been taken: 44.19%

Which of these steps will your agency take if the impasse is not resolved in the next 60-90 days?

* Cutting administrative costs: 53.49%

* Reducing staff hours or postponing payroll: 48.84%

* Reducing services: 39.53%

* Temporarily stopping services: 20.93%

* Temporarily shutting down: 4.65%

* None of these steps will be taken: 16.28%

Is there an approximate data that marks a “crisis point” for your organization, at which time you will be forced to begin ceasing services?

* Yes: 60.47% (within the 4th Quarter)

* No: 39.53%

On October 21, Representative Stephen Bloom (R-Cumberland) and Representative Dan Moul (R-Adams) introduced a package of stopgap bills to fund particular line items in Human Services, Education, Agriculture/Food Security, Health, and Higher Education. The package of bills does not contain general funding for education or school districts; it only includes: special needs, Title I, and textbooks. Additionally, the County Child Welfare Bill (HB 1595) is an 8.85% reduction from 2014-2015 availabe funding level. GPNP's full analysis of the bills is available here. On October 28, the Senate attempted to override Governor Wolf's veto of its stopgap bill. However, the veto override attempt failed.

Budget negotiations continued during November, which resulted in a tentative framework that later fell apart when the Senate defeated the tax plan. During the second week of December, the House and Senate passed competing budget bills. The Senate’s bill -- SB 1073 -- is a bipartisan budget bill supported by the Governor and a sweeping majority of Senators. The Senate’s bill was the product of negotiations that produced a new framework agreement toward a final budget. The competing bill -- HB 1460 -- does not hold the same bipartisan support. When the bills were passed, many things remained fluid regarding the budget, particularly the various revenue and tax bills needed for the 2015-2016 spending plan. The Pennsylvania Budget and Policy Center published a comparison of the House and Senate budget bills. Importantly, the Senate bill provides increased funding for human services and education, while the House bill does not provide increased funding in those areas. Department of Human Services Secretary Ted Dallas blogged about the increased human service funding contained in SB 1073.

At the same time as the House and Senate worked to advance their budget bills, local nonprofit and business leaders held a press conference in Pittsburgh to call for a final state budget. Participating in the press conference were Bishop David Zubik, Auberle CEO and GPNP Advisory Team Chair John Lydon, Neighborhood Academy Head of School Reverend Thomas E. Johnson Jr, United Jewish Federation Chair Cynthia Shapira, Peoples Natural Gas President and CEO Morgan O’Brien, Jones Day Partner Laura Ellsworth, and Community Human Services CEO Adrienne Walnoha. Click here to read the press release about the event. The press conference was covered by The Pittsburgh Post-GazetteWTAEWESAThe Pittsburgh Catholic, and The Jewish Chronicle,

On December 18, 2015, GPNP joined with Allies for Children and 30 other organizations to send a letter to Governor Wolf and legislative leaders advocating for a final negotiated budget. The letter is available hereThe Pittsburgh Post-Gazette excerpted the letter in its coverage of the December 19 House session, during which the framework agreement experienced a major setback when its pension component was defeated in the House. In response, the House began the process of initiating another stopgap proposal as an amendment to the Senate bill. The proposed stopgap would last for 11 months, and the tracking run for the bill is available hereThe Patriot-News also summarized the stopgap’s provisions. However, on December 22, the House rejected the stopgap proposal through a series of votes, and positioned SB 1073 for final passage. But, on December 23, the Senate voted to pass HB 1460, which sent it to the Governor for his review. Follwoing deliberations, Governor Wolf line-item vetoed HB 1460. Governor Wolf approved $23.39 billion of the $30.3 billion proposal, which released the budget’s full funding amounts for human services and other line items. However, the Governor only released six months of basic education funding for public schools. Click here to view the general fund tracking run from the line-item vetoed budget. According to the PLS Reporter, the General Assembly has adopted a “wait-and-see” approach while leaders continue to work toward a final budget solution. 

On March 16, 2016, the House and Senate passed HB 1801 to complete the budget. The Governor announced on March 23rd that he would allow the bill to become law without his signature. However, the Governor vetoed the budget’s accompanying fiscal code.  In response to the Governor’s decision, GPNP Executive Director told the Pittsburgh Post-Gazette “that nonprofits will be paying the debt service incurred because of the impasse for years, and that nonprofits are concerned the politics of the 2016 election year will cause another budget delay.”

In response to the Governor’s fiscal code veto, the General Assembly passed a new fiscal code bill with veto-proof majorities. On April 22, the Governor announced that he would allow the new fiscal code bill to become law without his signature, which ended the back-and-forth over the FY 2015-2016 budget. The tracking run showing the final enacted appropriations is available here.  

 

Background on Governor Wolf's FY 2015-2016 Proposal

Video of the Budget Proposal

Governor Tom Wolf's Speech

Official Budget Proposal

Education

  • Restoring the $1 billion in cuts to public education.
  • Increasing the main K-12 funding line by $400 million, or 7 percent, and special education funding by $100 million, or 9.6 percent.
  • Using $120 million to enroll 14,000 additional children in pre-kindergarten programs
  • Increasing funding to community colleges by $15 million.
  • Restoring the 50 percent of the cuts to higher education.
  • Asking colleges and universities to freeze tuition.
  • Proposing a new funding formula to provide more money to all districts, to help alleviate the burden on local property owners.

Taxation

  • Reducing the total tax burden on average middle-class homeowners by 13 percent.
  • Raising the personal income tax to 3.7 percent.
  • Exempting a family of four earning about $36,000, or up to 150 percent of the poverty level from personal income taxes.
  • Giving Renters earning less than $50,000 a year up to a $500 rent rebate.
  • Eliminating school real estate taxes for 270,000 senior citizen homeowners through rebate plans.
  • Implementing a 5% extraction tax on natural gas generating tying the revenues from the tax to funding for public education (the Pennsylvania Education Reinvestment Act).
  • Continuing to give local communities drilling impact funding, while the majority of funds will be invested in public education.
  • Reducing the average homeowner's property taxes by 50 percent resulting in lower taxes by an average of $1,000 per year.
  • Increasing the sales tax from 6 to 6.6 percent, and including services that currently are not taxed.
  • Increasing cigarette taxes by $1 a pack, as well as instituting a 40 percent tax on the wholesale price of other tobacco products, including smokeless tobacco, large cigars, loose tobacco and e-cigarettes.
  • Closing the Delaware loophole and cut the corporate net income tax rate by 40 percent in the first year and 50 percent by 2018.
  • Phasing out the Capital Stock and Franchise tax.

Manufacturing and Transportation

  • Building on investments created by Act 89 to improve transportation systems in Philadelphia, Pittsburgh and Erie.
  • Creating the "Made in Pennsylvania" cash-back jobs program.
  • Giving manufacturing companies that increase their annual taxable payroll by at least one million dollars cash payments of up to five percent of new taxable income the following year.
  • Giving Pennsylvania companies priority for Grant and Loan Programs.
  • Training for manufacturing jobs in steel, shale, gas, and clean water technology.

Healthcare and Human Services

  • Expanding the Medicaid program by accepting the funds made available under the Affordable Care Act.
  • Restoring partial funding for health and human services to the county level.

State Government

  • Cutting budgets for the next year that are not spend. Expected revenue up to $150 million in immediate savings and hundreds of millions over the long term.
  • Raising the state minimum wage to $10.10 an hour.
  • Modernizing state-run liquor stores to make them more consumer-friendly.
  • Changing the state and municipal pension by investing the money in a conservative account would produce a similar return over the long term and eliminating Wall Street management and fees.