Difference between revisions of "Pennsylvania state budget"

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(Expenditures by function)
(Expenditure trends)
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! valign="bottom" style="background-color:#444; color: white;" | Corrections
 
! valign="bottom" style="background-color:#444; color: white;" | Corrections
 
! valign="bottom" style="background-color:#444; color: white;" | Transportation
 
! valign="bottom" style="background-color:#444; color: white;" | Transportation
! valign="bottom" style="background-color:#444; color: white;" | Other
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! valign="bottom" style="background-color:#444; color: white;" | Other**
 
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|2012 || 18.4% || 2.8% || 1.9% || 33.2% || 3.5% || 9.3% || 30.8%
 
|2012 || 18.4% || 2.8% || 1.9% || 33.2% || 3.5% || 9.3% || 30.8%
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| style="background-color:black; color:white" align="center"|'''-1.00%''' || align="center" style="background-color:black; color:white"|'''-1.20%'''|| align="center" style="background-color:black; color:white"| '''-0.10%''' || align="center" style="background-color:black; color:white"|'''2.90%''' ||align="center" style="background-color:black; color:white"| '''0.10%''' || align="center" style="background-color:black; color:white"|'''-0.80% ''' || align="center" style="background-color:black; color:white"|'''0.00% '''
 
| style="background-color:black; color:white" align="center"|'''-1.00%''' || align="center" style="background-color:black; color:white"|'''-1.20%'''|| align="center" style="background-color:black; color:white"| '''-0.10%''' || align="center" style="background-color:black; color:white"|'''2.90%''' ||align="center" style="background-color:black; color:white"| '''0.10%''' || align="center" style="background-color:black; color:white"|'''-0.80% ''' || align="center" style="background-color:black; color:white"|'''0.00% '''
 
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|align="left" colspan="8" | <small>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]</small>
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|align="left" colspan="8" | <small>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]<br>'''Note**''': "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."<ref name=expenditures2013/></small>
 
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Revision as of 14:10, 4 August 2014


Pennsylvania state budget

Flag of Pennsylvania.png
Budget calendar:  Annual
Fiscal year:  2014
State credit rating:  AA (as of May 2012)
Current governor:  Tom Corbett
Financial figures
GF expenses[1]:  $27.761 billion (estimated for FY 2013)
All funds expenses:  $67.880 billion (estimated for FY 2013)
Spending % change:  Green Arrow Up Darker.svg1.39%[2]
% from federal funding:  30.63%
State debt:  $184,903,767,000
Per capita state debt:  $14,487
Other state budgets
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Policypedia Budget Policy-logo-no background.png
This page contains information about budget processes and policy issues in Pennsylvania, including:
  • A summary of the budget drafting process
  • Trends in expenditures and revenues
  • Current and past fiscal year budget developments
  • Financial transparency measures

Between fiscal year 2009 and fiscal year 2013, Pennsylvania's total expenditures increased by approximately $5.236 billion, from $62.644 billion in 2009 to $67.880 billion in 2013. This represents an 8.36 percent increase, below the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

Budget process

The state operates on an annual budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instruction guidelines are sent to state agencies in August of the year preceding the start of the new fiscal year.
  2. State agencies submit their requests to the governor in October.
  3. Agency hearings are held in December and January. Public hearings are held in February and March.
  4. The governor submits his or her proposed budget to the state legislature in February.
  5. The legislature typically adopts a budget in May or June. A simple majority is required to pass a budget. The fiscal year begins July 1.

Pennsylvania is one of 44 states in which the governor has line item veto authority.[6]

The governor is legally required to submit a balanced budget proposal. While the legislature is not legally required to pass a balanced budget, the Governor is legally required to sign a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
Pennsylvania $27,761 $24,144 $15,175 $800 $67,880 $5,314.00
Delaware $3,659 $1,783 $3,281 $439 $9,162 $9,896.85
Maryland $15,119 $11,811 $8,909 $1,135 $36,974 $6,236.32
New Jersey $31,618 $12,485 $6,735 $1,247 $52,085 $5,852.68
New York $58,960 $38,574 $32,305 $3,258 $133,097 $6,773.00
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Pennsylvania can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
Pennsylvania 18.4% 2.8% 1.9% 33.2% 3.5% 9.3% 30.8%
Delaware 24.6% 4.5% 0.3% 15.9% 3.0% 8.9% 42.9%
Maryland 19.5% 14.5% 3.7% 21.5% 4.3% 9.9% 26.5%
New Jersey 24.7% 7.8% 0.9% 21.6% 3.2% 9.3% 32.4%
New York 19.8% 7.6% 2.8% 29.4% 2.3% 6.2% 31.8%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

From 2008 to 2012, elementary and secondary education spending fell by one percentage point, or 5.2 percent, as a share of the budget. During the same period, Medicaid spending rose by nearly three percentage points, or 9.6 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
2012 18.4% 2.8% 1.9% 33.2% 3.5% 9.3% 30.8%
2011 19.5% 3.2% 2.1% 31.8% 3.2% 8.8% 31.4%
2010 19.8% 3.3% 2.2% 29.6% 3.4% 10.1% 31.6%
2009 19.7% 3.8% 2.2% 30.8% 3.3% 10.3% 29.9%
2008 19.4% 4.0% 2.0% 30.3% 3.4% 10.1% 30.8%
Change in % -1.00% -1.20% -0.10% 2.90% 0.10% -0.80% 0.00%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Pennsylvania $8,968 $11,472 $2,492 $89 $5,801 $28,822 $2,256.34
Delaware $0 $1,084 $206 $0 $2,440 $3,730 $4,029.17
Maryland $7,686 $4,075 $873 $0 $2,324 $14,958 $2,522.93
New Jersey $8,460 $12,193 $2,454 $1,118 $6,697 $30,922 $3,474.64
New York $11,232 $40,227 $6,253 $18 $2,461 $60,191 $3,062.98
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Pennsylvania ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $8,968 $11,472 $2,492 $89 $5,801 $28,822 $2,256.34
2012 $8,772 $10,801 $2,022 $95 $5,988 $27,678 $2,168.36
2011 $8,590 $10,436 $2,131 $65 $6,275 $27,497 $2,158.10
2010 $8,029 $9,969 $1,791 $0 $7,859 $27,648 $2,175.21
2009 $8,136 $10,199 $1,980 $0 $5,215 $25,530 $2,025.42
Change in % 10.23% 12.48% 25.86% N/A 11.24% 12.89% 11.40%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

DocumentIcon.jpg See budget bill: House Bill 1437

Fiscal year 2014

Pennsylvania state budget -- 2014
Pennsylvania State Legislature
Text:House Bill 1437
Legislative history
Introduced:May 29, 2013
House:June 12, 2013
Vote (lower house):108-92
Senate:June 30, 2013
Vote (upper house):33-17
Conference:June 20, 2013 (House concurred in Senate amendments)
Conference vote (lower house):111-92
Governor:Tom Corbett
Signed:June 30, 2013

On June 30, 2013, Governor Tom Corbett signed the state's primary budget bill into law. The budget as enacted increased funding for public schools, pensions, and corrections. It also included reduced business taxes.[14]

The fiscal year 2014 state budget increased spending by $719 million over the fiscal year 2013 budget (a 2.6 percent increase). Corbett had hoped to pass substantial reforms to the state's public pension system and increase transportation funding, but legislators were unable to come to an agreement on these matters, thereby delaying action until the fall session.[14]

Fiscal year 2013

See also: Pennsylvania state budget (2012-2013)

Fiscal year 2012

See also: Pennsylvania state budget (2011-2012)

Fiscal year 2011

See also: Pennsylvania state budget (2010-2011)

Fiscal year 2010

See also: Pennsylvania state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in Pennsylvania ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $27,031 40.4% $14,361 21.5% $24,177 36.1% $1,379 2.1% $66,948
2010-2011 $25,074 36.3% $13,694 19.8% $29,511 42.7% $868 1.3% $69,147
2009-2010 $24,942 36.6% $13,825 20.3% $27,669 40.6% $1,655 2.4% $68,091
Averages: $25,682.33 38% $13,960 21% $27,119 40% $1,300.667 2% $68,062
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Pennsylvania had a state debt of over $184 billion. Its state debt per capita was $14,487. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[15][16]

Total state debt in Pennsylvania[17]
Type Totals U.S. rank
Total state debt $184,903,767,000 8
Per capita debt $14,487 24
State and other fund expenditures $41,392,000,000 22

Public pensions

See also: Pennsylvania public pensions and Pennsylvania public employee salaries

A 2012 report from the Pew Center on the States noted that Pennsylvania's pension system was funded at 75 percent at the close of fiscal year 2010, below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[18]

Taken together, the funding ratio for the state's pension systems decreased from 89.65 percent in fiscal year 2007 to 64.37 percent in fiscal year 2012, a decrease of 25.28 percentage points, or 28.2 percent. Likewise, unfunded liabilities increased from just under $10.3 billion in fiscal year 2007 to more than $47 billion in fiscal year 2012.[19][20][21]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[22]

The table below lists the Standard and Poor's credit rating for Pennsylvania from 2001 to 2012 (grades from surrounding states are provided for additional context).[22]

S&P credit ratings from 2001 to 2012
Pennsylvania Delaware Maryland New Jersey New York
2012 AA AAA AAA AA- AA
2011 AA AAA AAA AA- AA
2010 AA AAA AAA AA AA
2009 AA AAA AAA AA AA
2008 AA AAA AAA AA AA
2007 AA AAA AAA AA AA
2006 AA AAA AAA AA AA
2005 AA AAA AAA AA AA
2004 AA AAA AAA AA- AA
2003 AA AAA AAA AA AA
2002 AA AAA AAA AA AA
2001 AA AAA AAA AA+ AA

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[23]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[23]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
Pennsylvania 30.63% $20,481,434,000 32
Delaware 24.46% $1,814,112,000 45
Maryland 30.25% $10,031,017,000 33
New Jersey 26.25% $13,412,759,000 42
New York 32.78% $48,698,785,000 28

Stimulus

Pennsylvania received $8.47 billion in federal stimulus funding between February 2009 and June 2013.[24]

Budget transparency

See also: Evaluation of Pennsylvania state website and Constitutional provisions regarding reading of bills

PennWATCH was required by law to go online by December 31, 2012. The site includes spending and contract information, tax collections and federal revenues, as well as the names, positions, and salaries of all state employees.[25]

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Pennsylvania, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[26][27]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Pennsylvania tied for eighth in the nation with 12 other states, earning six out of eight possible points.[27]

Pennsylvania - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting
{{{1}}}
Annual cycle Y
600px-Yes check.png
Binding revenue forecast
{{{1}}}
Legislative revenue forecast
{{{1}}}
Non-partisan staff Y
600px-Yes check.png
Constitution or statutory tax/spend limitations N
600px-Red x.png
TOTAL 6

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[27]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[28] According to the report, Pennsylvania received a grade of B- and a numerical score of 82.5, indicating that Pennsylvania was an "advancing" state in terms of transparency regarding state spending.[28]

Accounting principles

See also: Pennsylvania government accounting principles

The Pennsylvania Auditor General has been the state's fiscal watchdog since 1809, when the position 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.[29]

Contact information

Pennsylvania Office of Budget
303 Walnut Street - Verizon Tower, 7th Floor
Harrisburg, Pennsylvania 17101
Telephone: 717-787-2542

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. 14.0 14.1 The Express-Times, "Gov. Tom Corbett signs off on 2013-14 Pennsylvania state budget," June 30, 2013
  15. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  16. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  17. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  18. Pew Center on the States, "Widening Gap Update: Pennsylvania," June 18, 2012
  19. State Employees' Retirement System, "2012 Comprehensive Annual Financial Report," accessed November 19, 2013
  20. Public School Employees' Retirement System, "2012 Actuarial Valuation Report," accessed November 19, 2013
  21. Municipal Retirement System, "2012 Comprehensive Annual Financial Report," accessed November 19, 2013
  22. 22.0 22.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  23. 23.0 23.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  24. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  25. The Commonwealth Foundation, "Government transparency in Pennsylvania becomes a reality," July 13, 2011
  26. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  27. 27.0 27.1 27.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  28. 28.0 28.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  29. Pennsylvania Auditor General, "State and Local Audit Reports," accessed May 1, 2014