Corbett's Budget Explained to LV Human Services Providers

It was a tough crowd. Over 100 very concerned human services providers from all over the Lehigh Valley were crammed into Northampton Community College's Gates Center on March 16 to question Governor Tom Corbett's proposed $27.1 billion budget for next year, scheduled to take effect in July. Of the six panelists who spoke, only the Governor's own Executive Deputy Secretary of the Budget, Peter Tartline, attempted to explain the logic of this spending plan.

In the first of a two-part story, Tartaline explains the Governor's rationale. In Part 2, Lehigh Valley human services providers explain how funding cuts, which extend from an outright elimination of homeless assistance to a 76.7% reduction in mental health services, will hurt those of us who can least afford it.

How did the state get into this mess?

According to Tartline, revenues are simply $500 million below estimates as a result of the Great Recession. Pension costs have grown $486 million In addition, because of mandated cost increases, Pennsylvania is looking at a $1.4 billion shortfall for the next fiscal year.

"You can do three things," explained the Deputy Secretary. "You can cut costs ... You can reform programs, implement performance process improvements, management improvements. ... The third option is to raise your top line to improve your bottom line. You do that by raising taxes or improving the business climate."

Increasing revenue without tax hike

Given Pennsylvania's high corporate net income tax rate, Tartaline explained that any improvements in the business climate will be felt long-term, not immediately. He also reminded everyone of Governor Corbett's pledge against a tax hike. But the budget does include several proposals, most of them noncontroversial, to increase revenue by a total of $242 million.

For example, Governor Corbett is proposing the elimination of a 1% discount provided to vendors who remit sales and use taxes on time. Their discount will instead be capped at 250 per month. This will add $41.3 million to the state coffers.

Another money-saving proposal is to fund Pennsylvania's popular Farmland Preservation program with Growing Greener bond money instead of $20.5 million in cigarette taxes. That money will instead go into the general fund.

But there are two proposals that, according to Tartaline, are quite controversial.

First, Corbett wants to redirect about $72 million from the Race Horse Development Fund to various agricultural and veterinary programs. "The concept here is agriculture helping agriculture," Trataline explained.

Second, $59 million ind tobacco settlement fund money will go into the state treasury instead of being used to fund research. "We can forego funding basic research and instead put these dollars into direct services,' reasoned Tartaline.

Human Services Cuts

In a portion of the Executive Budget entitled "Preserving the Safety Net," Governor Corbett proposes a 20% reduction in the funding of seven separate human services programs. The monies will be provided in what is called a block grant, which does free counties from rigorous reporting requirements and provides more flexibility. But it's still $168.4 million less than it was last year.

In addition to these reductions, the General Assistance cash program, which helps 68,000 people statewide, will be eliminated, saving the state another $319 million.

A lawsuit challenging these cuts has already been filed in Commonwealth Court by the Disability Rights Network.

Education Cuts

In addition to these cuts to human services programs, the Corbett budget is proposing 20-30% reductions in contributions to state universities, which will save the state $240 million.

How these proposed cuts impact the Lehigh Valley's poor, elderly and disabled will be covered in a second installment.