Op-Ed: Making Ends Meet
With a $3 Billion Deficit
By State Rep. Marty Causer
When the state's current fiscal year comes to an end June 30, the Rendell administration anticipates a deficit of at least $3 billion. While Pennsylvania is in better fiscal shape than many states, this funding shortfall presents some serious challenges as lawmakers work toward adopting our 2009-10 state budget.
Many of you have cut back on your spending this year to make ends meet in this challenging economy, and you expect state government to do the same. After all, state government (unlike the federal government) cannot spend more than it takes in. If we don't cut spending to address the deficit, we have to raise taxes. I don't want to raise taxes, nor do I think that's the best way to recover from a recession.
Yet, the Rendell administration is continuing to push for a $29 billion budget for 2009-10 that actually INCREASES spending by more than $1 billion over what we will spend by the end of this year. Ironically, the governor's budget includes a lot of harsh funding cuts - some programs are even eliminated - but he's just redirecting that money to other programs he favors.
Recognizing that the governor's plan cannot be implemented without a large tax increase - even though we are receiving billions from the federal stimulus package - the state Senate passed its own budget on May 6 by a 30-20 vote. The Senate's plan includes a lot of the same cuts the governor made plus additional cuts to account for the growing economic decline, bringing total spending down to a more manageable $27.3 billion.
I commend the Senate for taking this important step toward adopting a more responsible budget. At the same time, I recognize there are concerns with the plan, especially in the areas of education and health care. It is important to remember that a lot of negotiation will take place before the budget is adopted. While this is undoubtedly not the final plan, we must also remember that no amount of negotiation will erase the huge deficit we face.
When it comes to education funding, we are fortunate that a significant portion of federal stimulus dollars are being directed toward our schools. But we need to be mindful of the impact on our budget when those stimulus funds run out. Under the Senate proposal, education funding would still be increased, but at a more conservative level to protect against a huge state budget deficit in the future that undoubtedly would end up being filled by a tax increase. Also keep in mind that the current state budget dedicates about 42 percent of its funding to basic and higher education - that equates to more than $11 billion.
The key to this year's budget is to spend what we have in a fair and equitable way. The governor's proposal simply fails to do that. Take Community Education Councils, for example. The governor seeks to eliminate their funding but would boost money for Community Colleges. Both serve the same function, but the northern tier has no Community Colleges. The governor's funding choices discriminate against our region.
Similarly, his proposed changes in funding for health care hit rural areas like ours the hardest. He wants to lower the already-low reimbursement rates from Medicaid and Medical Assistance, and proposes to eliminate other vital sources of funding, such as aid for critical access hospitals. Rural hospitals like ours are already struggling to meet the needs of our communities - and with more people losing health benefits, we need to ensure care remains available and accessible to all.
The bottom line of this budget is that we have to live within our means. It's time to go back to basics and support those programs and services that are essential to the health and safety of all Pennsylvanians. Funding anything beyond that will most likely result in a substantial tax increase. I, for one, will not balance the state budget on the backs of people already struggling to make ends meet.
To hear Causer's comments on the budget, tune in to today's LiveLine at 12:30 p.m. on 1490 WESB.
When the state's current fiscal year comes to an end June 30, the Rendell administration anticipates a deficit of at least $3 billion. While Pennsylvania is in better fiscal shape than many states, this funding shortfall presents some serious challenges as lawmakers work toward adopting our 2009-10 state budget.
Many of you have cut back on your spending this year to make ends meet in this challenging economy, and you expect state government to do the same. After all, state government (unlike the federal government) cannot spend more than it takes in. If we don't cut spending to address the deficit, we have to raise taxes. I don't want to raise taxes, nor do I think that's the best way to recover from a recession.
Yet, the Rendell administration is continuing to push for a $29 billion budget for 2009-10 that actually INCREASES spending by more than $1 billion over what we will spend by the end of this year. Ironically, the governor's budget includes a lot of harsh funding cuts - some programs are even eliminated - but he's just redirecting that money to other programs he favors.
Recognizing that the governor's plan cannot be implemented without a large tax increase - even though we are receiving billions from the federal stimulus package - the state Senate passed its own budget on May 6 by a 30-20 vote. The Senate's plan includes a lot of the same cuts the governor made plus additional cuts to account for the growing economic decline, bringing total spending down to a more manageable $27.3 billion.
I commend the Senate for taking this important step toward adopting a more responsible budget. At the same time, I recognize there are concerns with the plan, especially in the areas of education and health care. It is important to remember that a lot of negotiation will take place before the budget is adopted. While this is undoubtedly not the final plan, we must also remember that no amount of negotiation will erase the huge deficit we face.
When it comes to education funding, we are fortunate that a significant portion of federal stimulus dollars are being directed toward our schools. But we need to be mindful of the impact on our budget when those stimulus funds run out. Under the Senate proposal, education funding would still be increased, but at a more conservative level to protect against a huge state budget deficit in the future that undoubtedly would end up being filled by a tax increase. Also keep in mind that the current state budget dedicates about 42 percent of its funding to basic and higher education - that equates to more than $11 billion.
The key to this year's budget is to spend what we have in a fair and equitable way. The governor's proposal simply fails to do that. Take Community Education Councils, for example. The governor seeks to eliminate their funding but would boost money for Community Colleges. Both serve the same function, but the northern tier has no Community Colleges. The governor's funding choices discriminate against our region.
Similarly, his proposed changes in funding for health care hit rural areas like ours the hardest. He wants to lower the already-low reimbursement rates from Medicaid and Medical Assistance, and proposes to eliminate other vital sources of funding, such as aid for critical access hospitals. Rural hospitals like ours are already struggling to meet the needs of our communities - and with more people losing health benefits, we need to ensure care remains available and accessible to all.
The bottom line of this budget is that we have to live within our means. It's time to go back to basics and support those programs and services that are essential to the health and safety of all Pennsylvanians. Funding anything beyond that will most likely result in a substantial tax increase. I, for one, will not balance the state budget on the backs of people already struggling to make ends meet.
To hear Causer's comments on the budget, tune in to today's LiveLine at 12:30 p.m. on 1490 WESB.
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