Pennsylvania state budget (2009-2010)

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Pennsylvania's legislature passed its $28.05 billion FY2011 budget on June 30, 2010, marking the first time in eight years that the state has met its fiscal deadline.[1][2] Gov. Ed Rendell Gov. Rendell signed the budget into law on July 6, 2010, after a dispute regarding over the establishment an Independent Financial Office which left the state to start FY2011 without a budget.[3]

The state currently faces a deficit of us to $4 billion for the FY2012 state budget.[4]

Pennsylvania had a total state debt of $41,844,487,003 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[5]

Three months into FY2011, Pennsylvania's overall general fund revenue is running $76 million above projections.[6]

See also: The Pennsylvania State Budget on State Budget Solutions
2011 State spending & deficit in billions[7]
Total spending Pension Healthcare Education Welfare Protection Transport Debt
$68.9 $6.9 $20.2 $11 $9.4 $3.5 $8.3 $47.4
2011 Local spending & deficit in billions[7]
Total spending Pension Healthcare Education Welfare Protection Transport Debt
$74.1 $1.3 $4.0 $25.2 $5.8 $5.9 $5.5 $102.8

Fiscal Year 2010

See also: Archived Pennsylvania state budgets

The budget for FY 2009 came 101 days late, and most do not expect this year’s budget to be passed by the July 1, 2010 deadline. Since the FY 2009 budget passed, Pennsylvania is facing a revenue shortfall including an approximately $1.1 billion dollar general fund deficit.

Pennsylvania also faced rising pension costs and the disappearance of federal stimulus dollars. The state’s “Rainy Day” fund has also been exhausted.

Governor Rendell proposed a $29 billion General Fund budget for 2010-11, that increases businesses taxes, imposes new taxes on natural gas and tobacco products, and expands the sales tax to many goods and services currently exempt.[8]

The House Democrats latest attempt is a $28.2 billion proposal came on June 23, 2010, and is $700 million more than Senate Republicans had put on the table the prior day. The House Democrat's plan would raise new revenues and boost the basic subsidy for public schools by $300 million, whereas the Senate Republican does not.[9]

State and Local Debt per capita[10]

Debtor Debt Outstanding Per capita
State $41,186,955,000 $3,313
Local $78,773,223,852 $6,336
Total $119,960,178,852 $9,649

Fiscal Year 2009

Pennsylvania was the last state in the country to finalize its FY 2009 budget on October 9, 2009, a record setting 101 days past the start of the fiscal year on July 1, 2009.[11] Gov. Edward G. Rendell pushed for a $28.8 billion FY 2009 general fund budget with 16% increase in individual state income taxes to balance the $3.2 billion deficit. The Pennsylvania General Assembly was divided between the Democratic dominated House and Republican Senate, the later which approved a $27.3 billion general fund budget without income tax increases in May of 2009. The lvania House belatedly approved the Senate's budget plan after the July 1 fiscal deadline passed to get it to Gov. Rendell for a veto and to start "real negotiations."[12]

Gov. Rendell vetoed half of the budget that contained program cuts on August 5, 2009 sent to him while signing the items to keep general government services operating and pay state workers who had not been paid since the July 1 fiscal year started.[13] The deadlock continued into September as Gov. Rendell said he would veto a bipartisan $27.9 billion budget proposal.[14] The leaders of the House Democrats and both parties in the Senate stood by the $27.9 billion plan in a news conference on September 11, 2009 and encouraged their members to support it, admitting Gov. Rendell was not on board, but hopeful they could gain his approval through that process.[15]

Gov. Rendell finally agreed to a budget $100 million less than the September bipartisan plan with his signature on October 9th and refrained from holding a public signing, instead putting his stamp on the plan behind closed doors, because in his words, "I believe there is little reason to celebrate."[16] Gov. Rendell said in an October 23, 2009 interview that the FY 2010 budget will include layoffs for some of Pennsylvania's 76,600 state employees, but will be in the hundreds and not thousands as previously discussed. 293 state positions were cut in August and September 2009 with state agencies still determining the total number of positions that will need to be cut.[17]

Budget background

See also: Pennsylvania state budget

The $27.8 billion General Fund budget for FY 2010 was $1.9 billion lower than FY 2009 and $524 million smaller than FY 2009 when federal stimulus dollars were included. Education received a $300 million increase for a total of $5.5 billion. While the plan did not have a broad-based tax increase, it did include 25 cents per pack increase on cigarettes and projects a $350 million year-end balance as a hedge against economic uncertainties.[18]

Pennsylvania's fiscal year begins July 1 and ends June 30 of the following year. According to the state constitution, every year the Governor must present a spending recommendation to the Legislature. Agencies prepare budget requests starting in August for the Governor to review prior to making his/her own recommendation in February. Between the months of February and June both the House and the Senate review the budget proposal before finalizing the budget for the upcoming fiscal year. The Governor may sign, take no action, veto, or line-item veto an appropriation bill. If the Governor signs a bill, it becomes law upon signature. A bill also becomes law if the Governor fails to take action on the bill within a time certain.[19]

Budget figures

The following table provides a history of Pennsylvania's expenditures and gross domestic product (GDP).

Fiscal Year Expenditures (billions) GDP (billions)  % of GDP
2000 $75.5[20] $389.6[20] 19.3789%
2001 $80.7[20] $406.7[20] 19.8426%
2002 $85.9[20] $423.1[20] 20.3025%
2003 $90.2[20] $440.7[20] 20.4674%
2004 $94.4[20] $459.9[20] 20.5262%
2005 $101.3[20] $482.4[20] 20.9992%
2006 $104.0[20] $508.8[20] 20.4403%
2007 $107.8[20] $531.1[20] 20.2975%
2008 $111.8[20] $548.7[20] 20.3754%
2009 $116.0*[20] $547.8*[20] 21.1756%*
  • NOTE: The figures for FY 2009 were unfinalized.
  • See Pennsylvania state budget (2009-2010) for more details.

Budget transparency

See also: Pennsylvania Spending Transparency

Unfortunately, Pennsylvania was not yet transparent.

Despite the absence of a statewide site, there are several places to obtain the line items in the Pennsylvania budget online. As part of the new state Open Records law, the Pennsylvania Treasurer launched a database of state contracts. For 2011, the Pennsylvania State Senate is focused on creating an online budget database for citizens to use.[21] The Commonwealth Foundation's policy report titled A Taxpayer's Budget 2010: Responsible Spending for Pennsylvania identifies for citizens how the state spends their money on certain projects. The Commonwealth Foundation has a number of other research pieces detailing Pennsylvania's 2010-2011 Budget on its budget resources page.[22]

Commonwealth Foundation budget research:

Economic stimulus transparency

  • The state was facing a $250 million budget shortfall[23] Pennsylvania will receive approximately $1 billion total[24], with $668 million to help pay for Medicaid and $387.8 million to save K-12 education jobs.[25] The funding was less than the state had budgeted, leaving Pennsylvania with a $280 million hole and Gov. Rendell called for additional budget cuts.[26]
  • Pennsylvania established an economic recovery website to show how legislators and government officials in Pennsylvania are spending Federal funds.[28]

State budget websites and analysis

The Pennsylvania Office of the Budget has several documents on both Governor Rendell's proposed 2010-11 budget and the enacted 2009-2010 budget.[29]

The Commonwealth Foundation has put together several resources for the proposed 2010-2011 budget. Some of these resources include an overview of the state budget, data on spending increases by each department, and links to several other useful budget resources. Additionally, they have written A Taxpayer's Budget 2010: Responsible Spending for Pennsylvania. This report identifies opportunities to cut over $4 billion in wasteful state spending in Governor Rendell's proposed FY 2010-11 budget and offers a series of recommendations for resolving the current revenue shortfall and for reducing the size and burden of government on Pennsylvanians. In 2009, the Commonwealth Foundation wrote a similar report that identified wasteful spending in the Pennsylvania budget.[30][31][32][33]

For comprehensive look at Pennsylvania state spending (which includes "special funds" and federal funds spent by the state), see the Governor's Executive Budget.[34]

Each of the four legislative caucuses has a budget page with spreadsheets and analysis:

The Pennsylvania Budget and Policy Center also offers analysis of Pennsylvania government spending.

See also: Evaluation of Pennsylvania state website

Accounting principles

Pennsylvania Department of the Auditor General has been the commonwealth's fiscal watchdog since 1809, when it was created by an act of the General Assembly. The auditor general was appointed by the governor until 1850, when the position became an elected office. State and local audits reports are published online. Jack Wagner was elected Auditor General in 2004 and re-elected in 2008.[35]

The Institute for Truth in Accounting (IFTA) rates Pennsylvania “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Pennsylvania's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[36] Pennsylvania's CAFRs are annual publications of the Pennsylvania Office of the Budget. The Office of the Budget is authorized by the Administrative Code of 1929; it is under the direct supervision of the Secretary of the Budget, who reports to the Governor. Anna Maria Kiehl has been Chief Accounting Officer for Office of the Budget since December of 2007 and Mary A. Soderberg has been Secretary Office of the Budget since her appointment in July of 2008.[37][38]

Credit Rating Fitch Moody's S&P
Pennsylvania[39] AA Aa2 AA
See also: Pennsylvania Spending Transparency and Pennsylvania government accounting principles

See also

External links

Additional reading

References

  1. The Pittsburgh Post-Gazette "State budget passed -- and on time" July 1, 2010
  2. The Standard-Journal "Budget process won’t be smooth" April 17, 2010
  3. The Philadelphia Inquirer "Pa. budget awaits votes on two bills" July 2, 2010
  4. The Scranton Times-Tribune "Revenue stop is big challenge for Pennsylvania budget" Dec. 20, 2010
  5. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  6. Businessweek "Pa. budget collections beat expectations in Sept." Oct. 1, 2010
  7. 7.0 7.1 USA Spending, State Guesstimated* Government Spending
  8. General Fund budget for 2010-11
  9. The Scranton Times-Tribune "No deal yet on state budget" June 24, 2010
  10. Commonwealth Foundation, Pennsylvania State & Local Taxpayer Debt, May 11, 2010
  11. WGAL.com, "Pa. Budget Done Deal; $27.8B Spending Plan Approved, Signed: Pennsylvania Budget Passes After Historic 101-Day Delay," October 9, 2009
  12. Pennlive.com, "Gov. Ed Rendell to address Pennsylvania budget impasse Monday morning," July 12, 2009
  13. Pittsburgh Post-Gazette, "Budget facing Rendell vetoes: Governor expected to slash billions i eat bugs for breakfast going over bill line by line," August 5, 2009
  14. The Patriot-News, "Report: Gov. Ed Rendell vows to veto Pennsylvania budget proposal," September 11, 2009
  15. The Associated Press, "Pennsylvania lawmakers outline plan to end state budget impasse," September 11, 2009
  16. WGAL.com, "Pa. Budget Done Deal; $27.8B Spending Plan Approved, Signed: Pennsylvania Budget Passes After Historic 101-Day Delay," October 9, 2009
  17. Patriot-News, "State employee layoffs to number in the hundreds, Pennsylvania Gov. Ed Rendell says," October 23, 2009
  18. "Governor Rendell Press Release, "Governor Rendell Signs Budget that Cuts Overall Spending, Boosts Education Funding, With No Broad-Based Tax Increase," October 9, 2009
  19. State of Pennsylvania, "The budget process in Pennsylvania," accessed June 1, 2009
  20. 20.00 20.01 20.02 20.03 20.04 20.05 20.06 20.07 20.08 20.09 20.10 20.11 20.12 20.13 20.14 20.15 20.16 20.17 20.18 20.19 US Government Spending, "Pennyslvania State and Local spending," accessed May 31,2009
  21. "Pennsylvania Senate committed to taxpayer database," Pittsburgh Tribune-Review, January 20, 2011
  22. database of state contracts
  23. http://www.post-gazette.com/pg/10222/1078883-454.stm "Rendell works to fix state budget shortage" August 10, 2010
  24. Cite error: Invalid <ref> tag; no text was provided for refs named totals
  25. Pittsburgh Post-Gazette "Pa. to get $1 billion for teacher jobs, Medicaid" August 11, 2010
  26. The Philadelphia Inquirer "Rendell proposes wide-ranging cuts to fill $280 million budget gap" Aug. 12, 2010
  27. Wall Street Journal, "Stimulus Spending by State," March 12,2009
  28. Pennsylvania Recovery
  29. Budget Office Resources
  30. Commonwealth Foundation Spending Report
  31. Commonwealth Foundation resources
  32. Budget overview
  33. Spending data by department
  34. Governor's Executive Budget
  35. Department of the Auditor General Web site, accessed November 9, 2009
  36. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  37. Pennsylvania Office of the Budget Web site, accessed November 9, 2009
  38. CAFRs
  39. State of Indiana, “State Credit Ratings-as of June 24, 2009"