Pennsylvania state budget (2009-2010)

Note: This article was last updated in 2010. Click here for more recent information on state budgets and finances.

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. 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.

The state faced a deficit of up to $4 billion for the FY2012 state budget.

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.

Three months into FY2011, Pennsylvania's overall general fund revenue was running $76 million above projections.

See also: The Pennsylvania State Budget on State Budget Solutions

2011 State spending & deficit in billions

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

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 did not expect the budget for FY 2010 to be passed by the July 1, 2010 deadline. Since the FY 2009 budget passed, Pennsylvania faced 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 had also been exhausted.

Governor Rendell proposed a $29 billion General Fund budget for 2010-11 that would increase businesses taxes, impose new taxes on natural gas and tobacco products, and expand the sales tax to many goods and services that were exempt.

The House Democrats raised a $28.2 billion proposal on June 23, 2010, and was $700 million more than Senate Republicans had put on the table the prior day. The House Democrats' plan would have raised new revenues and boost the basic subsidy for public schools by $300 million, whereas the Senate Republicans' plan would not have.

State and Local Debt per capita

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. 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 Pennsylvania House 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."

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. The deadlock continued into September as Gov. Rendell said he would veto a bipartisan $27.9 billion budget proposal. 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.

Gov. Rendell finally agreed to a budget of $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." 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.

Budget background

See also: Pennsylvania state budget and finances

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 projected a $350 million year-end balance as a hedge against economic uncertainties.

Pennsylvania's fiscal year began July 1 and ended June 30 of the following year. According to the state constitution, every year the Governor must present a spending recommendation to the Legislature. Agencies prepared 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 reviewed 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.

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	$389.6	19.3789%
2001	$80.7	$406.7	19.8426%
2002	$85.9	$423.1	20.3025%
2003	$90.2	$440.7	20.4674%
2004	$94.4	$459.9	20.5262%
2005	$101.3	$482.4	20.9992%
2006	$104.0	$508.8	20.4403%
2007	$107.8	$531.1	20.2975%
2008	$111.8	$548.7	20.3754%
2009	$116.0*	$547.8*	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

Despite the absence of a statewide site, there were 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 focused on creating an online budget database for citizens to use. The Commonwealth Foundation's policy report titled A Taxpayer's Budget 2010: Responsible Spending for Pennsylvania identified for citizens how the state spends money on certain projects. The Commonwealth Foundation had a number of other research pieces detailing Pennsylvania's 2010-2011 Budget on its budget resources page.

Commonwealth Foundation budget research:

• A Taxpayer's Budget 2010: Responsible Spending for Pennsylvania
• Budget Facts 2010

Economic stimulus transparency

• The state was facing a $250 million budget shortfall Pennsylvania received approximately $1 billion total, with $668 million to help pay for Medicaid and $387.8 million to save K-12 education jobs. The funding was less than the state had budgeted, leaving Pennsylvania with a $280 million deficit. Gov. Rendell called for additional budget cuts.

• Pennsylvania received an estimated $5,766,142,442 from the American Recovery and Reinvestment Plan of 2009.

• Pennsylvania established an economic recovery website to show how legislators and government officials in Pennsylvania were spending Federal funds.

State budget websites and analysis

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

The Commonwealth Foundation assembled several resources for the proposed 2010-2011 budget. Some of these resources included an overview of the state budget, data on spending increases by each department, and links to several other useful budget resources. Additionally, they drafted A Taxpayer's Budget 2010: Responsible Spending for Pennsylvania. This report identified opportunities to cut over $4 billion in wasteful state spending in Governor Rendell's proposed FY 2010-11 budget and offered 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.

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

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

• Pennsylvania House Democratic Appropriations Committee
• Pennsylvania House Republican Appropriations Committee
• Pennsylvania Senate Republicans
• Pennsylvania Senate Democrats

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 (dead link) was elected Auditor General in 2004 and re-elected in 2008.

In 2008, the Institute for Truth in Accounting (IFTA) rated 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 did 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 did not include significant liabilities for the pension plans and for other post-employment benefits, such as health care. 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. As of June 2022, Anna Maria Kiehl had been Chief Accounting Officer for the Pennsylvania Office of the Budget since December of 2007 and Gregory Thall was Secretary Office of the Budget.

Credit Rating	Fitch	Moody's	S&P
Pennsylvania	AA	Aa2	AA

See also: Pennsylvania Spending Transparency

See also

• Pennsylvania government sector lobbying
• Pennsylvania public employee salaries
• Pennsylvania public pensions
• Pennsylvania budget facts (2010)
• Pennsylvania state budget and finances
• Pennsylvania budget analysis for 2010

External links

• State Budget Solutions, Pennsylvania
• Model transparency legislation from the American Legislative Exchange Council
• Commonwealth Foundation for Public Policy Alternatives
• A Taxpayer's Budget 2010: Responsible Spending for Pennsylvania
• Allegheny Institute for Public Policy
• Governor's Office of the Budget, 2008-2009 (dead link)
• Pennsylvania state site
• Pennsylvania General Assembly

Additional reading

• Gov. Ed Rendell, "2009-10 Budget Address," February 4,2009
• Meadville Tribune, "Local state workers protest budget stalemate," July 16, 2009
• Philadelphia Business Journal, "Phila. state legislators back mayor on sales tax," July 27, 2009
• The Philadelphia Inquirer, "Rendell optimistic on budget; others less so," July 24, 2009
• Reuters, "Pennsylvania gets stop-gap budget, Philly left out," August 5, 2009
• Pittsburgh Tribune-Review, "Pennsylvania Governor Rendell doles out $361 million in borrowed money," August 9, 2009