PA State Budget Affects Local Nonprofits
Pennsylvania’s fiscal year begins on July 1 and ends on June 30. Each year, the governor and general assembly are required to pass a budget by the June 30 deadline. Follow this link to view a General Chart of PA Budget Process. GPNP continues to provide Weekly Summaries of the Budgeting Process at the PA State Level.
In the event of a delayed state budget, there are a number of key steps that nonprofit organizations can follow to prepare for disruptions. A list of steps provided by The Forbes Funds' Executive In Residence Don Goughler is available here.
Nonprofits should be in regular contact with legislators regarding budgetary matters. Contact the legislators today!
Governor Tom Wolf delivered his budget address and emphasized a "new way of doing business" that does not involve deep cuts to important community programs or broad based tax plans.
To balance the budget, the Governor proposed multiple cost saving tactics such as department consolidation, finding efficiencies in government, and new fiscal management practices. He also emphasized a commitment to seniors, education, and addressing the opioid epidemic. Governor Wolf's budget also includes proposed funding reductions for line items that support community services such as job training, health programs, and STEM education, just to name a few.
Governor Wolf's proposed cuts impact a number of line items that fund nonprofits. If your organization receives state funding, please look for your line item in the tracking run and complete our brief survey available here so we understand the proposed budget's impact on GPNP members.
Governor Wolf's budget proposal is just the first step in Pennsylvania's budget process. In the coming weeks, the House and Senate Appropriations Committees will hold hearings on the budget. Now is the time for nonprofits to submit feedback on the Governor's budget to the Appropriations Committees. Click here to download a schedule of the hearings as well as contact information for the committee members from our region. When you send your comments and feedback to the committees, please let us know by emailing email@example.com.
On June 30, 2016, the House concurred with the Senate's version of the budget bill, which sent the FY 2016-2017 budget proposal to Governor Tom Wolf. The tracking run for the budget is available here.
Key budget items include:
Several line items received significant increases. Behavioral health services received a 23.2% increase (explained under Drugs and Alcohol) and autism intervention and services received a 15.5% increase. The intellectual disabilities community waiver program received a 6.67% increase, which will leverage an additional $120 million in federal funds to support services. However, the 10% human service program cuts from FY 2012-2013 are not restored. Line items that are flat funded include cash grants; supplemental grants - aged, blind, and disabled; expanded medical services for women; child care assistance; nurse family partnership; Human Services Development Fund; and homeless assistance, among others.
As shown in the tracking run, the County Child Welfare line item received an increase of $196 million in state funds. However, under the rebalancing system used for the County Child Welfare line item, a portion of those funds are going to be used to pay the fourth quarter payments from FY 2015-2016. The remainder will be used to cover the first, second, and third quarters of FY 2016-2017. Under the rebalancing system, the fourth quarter payment for FY 2016-2017 would be included in the FY 2017-2018 budget. According to the County Commissioners Association of Pennsylvania (CCAP), the first three quarters for FY 2016-2017 are receiving an approximate 4.5% increase from the first three quarters of FY 2015-2016. It is expected that the fourth quarter total for FY 2016-2017 will reflect the same 4.5% increase when it is added to next year's budget. CCAP's budget analysis is available here.
Because of this, the increase in the Department of Human Services budget is not quite the 4.1% shown on the tracking run, since a significant portion covers FY 2015-2016. Excluding the County Child Welfare line item, the increase spread across other select areas totals approximately 2.5%. The numbers in the chart below show the change in the human services budget when the County Child Welfare line item is removed.
FY 2015-2015 Without County Child Welfare
|FY 2016-2017 Without County Child Welfare||$ Increase||% Change|
Drugs and Alcohol
According to an analysis we received, the budget includes $10,750,000 in new state funds to combat the opioid epidemic. Of the new spending, $750,000 is included in the Drug & Alcohol Department's budget and $10 million is included in the Department of Human Services' behavioral health services appropriation for services managed by county drug and alcohol agencies. The analysis indicated that the new state spending is insufficient to leverage additional federal dollars.
Basic education received an additional $200 million, and higher education received a 2.5% increase across the board. Early childhood education received an additional $30 million and special education received an additional $20 million. Allies for Children published an analysis of the budget here.
Additionally, the revenue package passed by the General Assembly included an additional $25 million for the Educational Improvement Tax Credit.
The overall budget for the Department of Community and Economic Development decreased by 35% in large part because the Commonwealth Financing Authority Bond Program was removed from the department's budget. The Morning Call summarized the rationale here. The Center for Local Government Services was also cut by 50%. The Housing Allianceo f Pennsylvania published an analysis of Housing and Community Development funding here.
The Pennsylvania Council on the Arts received an 8.1% increase.
Revenue Package to Fund the Budget
The $1.3 billion revenue package that will fund the budget is based on increased revenue from a number of sources. This includes a $1 per pack increase to cigarette taxes; a $200 million loan from the state medical malpractice insurance fund; expanded liquor sales and gambling; sales tax on digital downloads; new taxes on smokeless tobacco, roll-your-own tobacco, and electronic cigarettes, among other items. Click here to view the AP’s summary of the revenue package.
GPNP worked throughout the year to advocate for an on-time budget that fully funds the services provided by nonprofits. A summary of the FY 2016-2017 budget process and GPNP's advocacy work is available here.
GPNP’s summary of the FY 2015-2016 budget process and impasse is available here. During the budget cycle and impasse:
- GPNP hosted its Annual Budget Briefing with Senate Minority Leader Jay Costa (D-Allegheny), Representative Brian Ellis (R-Butler), and other key leaders;
- GPNP’s comments were carried in statewide media and our members were featured in a Pittsburgh Business Times story on the impasse’s impact;
- GPNP’s op-ed was read on the House floor by Representative Dan Frankel (D-Allegheny);
- GPNP members and supporters advocated for a resolution through social media, generating over 100,000 impressions on Twitter – including 45,000 at GPNP’s October 15th Summit;
- GPNP held legislative visits with over 50% of the southwestern Pennsylvania delegation;
- GPNP and The Forbes Funds conducted research and advised nonprofits on strategies to make it through for the impasse; and
- GPNP participated in the PA People Count campaign, among other activities to end the budget impasse.
Click here to learn more about GPNP’s work during the budget impasse.
GPNP's Summary of the Final 2014-2015 Budget contains information about the adopted budget. During the 2014-2015 budget process, GPNP hosted a session during state budget season called, “From Expense to Investment: Nonprofits as the solution to state budget challenges.” Gary VanLandingham, Director of the Pew-MacArthur Results First Initiative, presented a new model of Impact Based Budgeting that has been developed to assist states in identifying effective programs and determining return on investment during the state budgeting season. View the event summary and presentation slides.