Deficit-ridden Pennsylvania warned of another hit to credit

The Associated Press | Thursday, July 6, 2017, Trib Live

HARRISBURG — A credit rating agency is putting Pennsylvania on notice that it faces another downgrade that increases the cost of government borrowing if the state doesn’t improve its finances.

Standard and Poor’s on Thursday said putting Pennsylvania on a negative “creditwatch” reflects Pennsylvania’s eroding financial position. It says it also reflects its view that there’s a “significant likelihood” that Pennsylvania state government won’t pass a structurally balanced budget for the fiscal year that began Saturday.

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Pennsylvania lawmakers told to stay away as budget talks continue

Angela Couloumbis and Karen Langley | Wednesday, July 5, 2017, Pittsburgh Post-Gazette

HARRISBURG — Pennsylvania’s Capitol hallways looked deserted Wednesday, even though the state is nearly a week into the new fiscal year without a complete budget.

Budget negotiators on Wednesday said that talks are continuing, but Gov. Tom Wolf and Republicans who control both legislative chambers have yet to strike a deal on a plan to pay for the nearly $32 billion in spending approved last week.

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Podcast – C&G’s “The Public Forum” on KQV 1410 – July 29, 2016

In case you missed it, here is the Podcast from our two minute drive time segment that aired on Friday, July 29, 2016, on KQV 1410, “Live from the Democratic National Convention,” by Nello Giorgetti.

Our next segment will air on Friday, August 12, 2016, at 8:12 a.m. and 5:12 p.m.

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If you have questions please contact Michelle Vezzani at mvezzani@cohenlaw.com or the public affairs professional with whom you work.

Podcast – C&G’s “The Public Forum” on KQV 1410 – July 1, 2016

In case you missed it, here is the Podcast from our two minute drive time segment that aired on Friday, July 1, 2016, on KQV 1410, “Charge of the light brigade,” by Nello Giorgetti.

Our next segment will air on Friday, July 15, 2016, at 8:12 a.m. and 5:12 p.m.

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If you have questions please contact Michelle Vezzani at mvezzani@cohenlaw.com or the public affairs professional with whom you work.

Today on “The Public Forum” on KQV Radio 1410

The Public Forum is a two minute drive time segment that will air every other Friday on KQV 1410 and will discuss current topics impacting Harrisburg, D.C. and the business community.

Today’s topic is “Charge of the light brigade,” by Nello Giorgetti.  Listen this morning at 8:12 a.m. or this afternoon at 5:12 p.m. on KQV Radio 1410.

We hope you will listen!!!

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If you have questions please contact Michelle Vezzani at mvezzani@cohenlaw.com or the public affairs professional with whom you work.

Podcast – C&G’s “The Public Forum” on KQV 1410 – June 3, 2016

In case you missed it, here is the Podcast from our two minute drive time segment that aired on Friday, June 3, 2016, on KQV 1410, “The Pennsylvania State Budget, Deja Vu all over again,” by Nello Giorgetti.

Our next segment will air on Friday, June 17, 2016, at 8:12 a.m. and 5:12 p.m.

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If you have questions please contact Michelle Vezzani at mvezzani@cohenlaw.com or the public affairs professional with whom you work.

Today on “The Public Forum” on KQV Radio 1410

The Public Forum is a two minute drive time segment that will air every other Friday on KQV 1410 and will discuss current topics impacting Harrisburg, D.C. and the business community.
Today’s topic is “The Pennsylvania State Budget, Deja Vu all over again,” by Nello Giorgetti.

Listen this morning at 8:12 a.m. or this afternoon at 5:12 p.m. on KQV Radio 1410.

We hope you will listen!!!

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If you have questions please contact Michelle Vezzani at mvezzani@cohenlaw.com or the public affairs professional with whom you work.

Podcast – C&G’s “The Public Forum” on KQV 1410 – May 6, 2016

In case you missed it, here is the Podcast from our two minute drive time segment that aired on Friday, May 6, 2016, on KQV 1410, “Pennsylvania’s Budget Battle: The Sequel,” by Kim Hileman.

Our next segment will air on Friday, May 20, 2016, at 8:12 a.m. and 5:12 p.m.

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If you have questions please contact Michelle Vezzani at mvezzani@cohenlaw.com or the public affairs professional with whom you work.

Today on “The Public Forum” on KQV Radio 1410

The Public Forum is a two minute drive time segment that will air every other Friday on KQV 1410 and will discuss current topics impacting Harrisburg, D.C. and the business community.

Today’s topic is “Pennsylvania’s Budget Battle: The Sequel,” by Kim Hileman.  Listen this morning at 8:12 a.m. or this afternoon at 5:12 p.m. on KQV Radio 1410.

We hope you will listen!!!

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If you have questions please contact Michelle Vezzani at mvezzani@cohenlaw.com or the public affairs professional with whom you work.

Podcast – C&G’s “The Public Forum” on KQV 1410 – March 11, 2016

In case you missed it, here is the Podcast from our two minute drive time segment that aired on Friday, March 11, 2016, on KQV 1410, “Change Creates Gridlock,” by Rob Vescio.

Our next segment will air on Friday, March 25, 2016, at 8:12 a.m. and 5:12 p.m.

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Today on “The Public Forum” on KQV Radio 1410

The Public Forum is a two minute drive time segment that will air every other Friday on KQV 1410 and will discuss current topics impacting Harrisburg, D.C. and the business community.

Today’s topic is “Change Creates Gridlock,” by Rob Vescio and will air at 8:12 a.m. and 5:12 p.m.

We hope you will listen!!!

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Today on “The Public Forum” on KQV Radio 1410

The Public Forum is a two minute drive time segment that will air every other Friday on KQV 1410 and will discuss current topics impacting Harrisburg, D.C. and the business community.

Today’s topic is “Divided Government,” by Rob Vescio and will air at 8:12 a.m. and 5:12 p.m.

We hope you will listen!!!

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

The Public Forum

The Public Forum is a two minute drive time segment that will air every other Friday on KQV 1410 beginning, Friday, February 12, 2016. The segments will air at 8:12 a.m. and 5:12 p.m.

The segments will discuss current topics impacting Harrisburg, D.C. and the business community. We hope you will listen.

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

 

The Phony War and The Pennsylvania Budget Crisis of 2015

Earlier this year I spoke about how even though the Pennsylvania government was politically divided with a Democratic Governor and a Republican General Assembly there was room for common ground and an opportunity for a Grand Bargain of both increased education funding with pension reform and liquor privatization. I believed that there was sufficient common interest in not revisiting the budget wars of the Rendell and Casey years–the last time Pennsylvania government was so divided.

I was wrong.

I am, by education and disposition, somewhat of an amateur historian, much to the bemusement and boredom of my kin and friends. After the fall of Poland in the Fall of 1938 to the forces of Nazi Germany, the Soviet Union, France and the United Kingdom went to war against the aforementioned Germans. Except for a misadventure in Norway and some U Boat action in the North Atlantic not much happened between the combatants until the German Army rolled through the Ardennes in May of 1940 on their way to Paris, plunging Europe into darkness.

This 6 month period was known as the phony war.

Back in the Casey and Rendell budget standoffs the public was actively engaged. Welfare recipients whose benefits had ceased were camping on the grounds of the Capitol; public employees were laid off; and state parks were closed. In a shrewd move by Rendell, the revenue employees who insured that the casinos properly remitted their taxes to the Commonwealth, were deemed as unnecessary, promptly closing the casinos.

There was spectacle, gamesmanship and pain to spare.

Since those days however the game has changed. The courts ordered that welfare recipients must receive their benefits and that state employees must be paid.

Certainly the myriad non-profit agencies that provide services to the medically needy and the indigent poor have been affected and, the school districts, all of whom receive assistance from the Commonwealth are impacted—the poor ones–first of course. Generally speaking, the general public has not been affected. Perhaps if there were more of a crisis atmosphere, perhaps if the State game lands were closed, or the liquor stores were suddenly shuttered then the public would stand up and demand a budget.

But until all the schools close and the mentally ill and the elderly no longer get their services the Phony War in Harrisburg will continue.

by Nello Giorgetti

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Baking a Budget

This past spring I wrote about Washington, DC’s gridlock and the role legislative tools like ‘earmarks’ can play to undo the stoppage. Congress, in a laudable effort to make government more transparent did away with earmarks some time ago arguing, among other things, that eliminating earmarked special projects creates a cost savings.

My retort was and is succinct. Bunk! This spring I wrote the money supposedly saved by eliminating earmarks is “folded back into” agencies’ budgets creating no cost savings.

One reader kindly pointed out that he and perhaps others were unfamiliar with “folding money back into a budget” and additional explanation is warranted. I agree.

To understand “folding money back into a budget” and why eliminating earmarks saves no money whatsoever, it helps to understand how a federal budget is “baked” at all.

There are three main ingredients. First, you need a revenue projection. How much money will the federal government have to spend in a fiscal-year? Of course that figure, like most topics in Washington, DC, is debatable. Depending on how you interpret countless (pun intended) facts, figures, expenditures, contract commitments, unspent funds, over spent accounts, tax cuts, sequestration factors, etc. etc. etc. you arrive at infinite possibilities. For now, let’s agree that creating a revenue projection is as much an art as it is a science and is a topic for a different day.

Second, you need the President’s priorities. The Office of Management and Budget (OMB), a division of the White House, prepares the priorities by communicating with every federal agency to understand their priorities. Through another separate process (another topic for another different day) OMB synthesizes the claimed needs creating the President’s official budget request (Note, it is only a request.) presented to Congress, by law, by the first Monday in February.

Third, to bake a budget correctly, you need a Congressional Budget Resolution. That said, there have been more than a few years in recent past when there was no budget resolution or it’s passed long after the money is doled out. I guess in such years you sprinkle it on top; decoration.

A Resolution is different from legislation, but still runs through the traditional legislative process with a few more rules and requirements. And, you guessed it, discussing the details is better left to a different day! The gist is simple enough. It is an agreed to budget, developed by the House and Senate Budget Committees, considering as much of the President’s requested budget as possible. The House and Senate vote on the compromised budget and presto! The dough (yes, pun intended) is made!

And you thought your mom’s apple turnover took time.

The Budget Resolution delineates how much money each of the 13 Congressional appropriation subcommittees receives. In DC-Speak, the allotments are called “Section 302(b) allocations.” Think of the allocations as the 13 apple turnovers you’re about to bake from that bill ball of Budget Resolution.

The appropriation subcommittees each have jurisdiction over certain federal agencies, ultimately accounting (pun intended) for all, i.e. The Senate and House Transportation, Housing and Urban Development appropriations subcommittees are tasked with passing a law that tells those agencies what they will have to spend and what they will spend it on.

Earmarks (Remember the earmarks?) were always accounted for at the discretion of each appropriations subcommittee. They would decide what percentage of their 302(b) allocation to reserve for earmarked projects. There were “education earmarks,” “transportation earmarks,” “energy earmarks;” you get the picture. Regardless of the type of earmark lobbied, drafted, and included in an appropriations bill no earmarkable dollars were distributed outside of their committees’ jurisdictions. In other words, the House Defense Appropriations Subcommittee could not draft an earmark using the Transportation Subcommittee’s money.

That’s important because when earmarks were disallowed, each appropriations subcommittee was forced to FOLD THEIR OTHERWISE DESIGNATED EARMARK MONIES BACK INTO THEIR 302b ALLOCATION intended for the greater good of the (fill in the blank) federal agencies.

The agencies get their piece of the pie (or apple turnover) no matter what. However, instead of Congress being able to tell the agencies how to spend a small percentage of the dough, the agencies decide how to spend all of it. There is no political influence. There is no grassroots influence. There is no community influence or input.

Simply put, your Member of Congress has less, if any say, about how tax dollars are spent in your Congressional District or State because the small amount of discretionary earmarked funding is folded back into the agencies’ budgets.

by Aaron Grau

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Death and Taxes

Governor Wolf earlier this month presented his budget for fiscal year 2015-2016. It was actually one of the more interesting budgets of the past 30 years. Not because it advocated for tax increases and acknowledged a state revenue deficit of over 2.5 billion dollars.

No, this was not just a budget address but almost a complete overhaul of both state government and the tax code. It was a political manifesto as it was a budget.

For decades there have been complaints about the property tax and its inequities. There have been countless solutions, from money from legalized gambling to Allegheny County’s RAD tax—none have stopped the inevitable rise in millage rates. Governor Wolf’s solution is a rate increase and broadening of the base of the state sales tax, with the majority of the additional dollars collected going to local school districts with a mandate to reduce property taxes.

The corporate community has long complained about the high taxes on business in Pennsylvania making us non-competitive with other states in attracting or maintaining businesses. Governor Wolf would complete the long hoped for demise of the Capital Stock and Franchise Tax and also cut the Corporate Net Income rate in half in just two years. He would fund these cuts with the demise of the Delaware Loop hole.

Governor Wolf would use an excise tax on natural gas extraction to increase funding for education and raise the Personal Income Tax to fill the deficit. Plus there would be a tax on cigars and smokeless tobacco to round out the tax smorgasbord.

Reaction from the Republican controlled General Assembly was of course, predictable.

Now whether we will see any or all of these proposed taxes come the end of June when the Pennsylvania Constitution mandates a budget be in place remains to be seen.

There is a deserved skepticism on state mandated property tax reductions, local municipalities, counties and school districts are ultimately responsible for the levying and spending of property taxes. The business tax cuts and closing of loopholes currently has the business community divided between the larger corporations and their S-Corp brethren.

Republican options include selling off the liquor stores and using the money to bridge the revenue gap; fixing the state employee’s pension fund deficits to reduce the cost of the Commonwealth’s contributions into that fund. Or just cutting the state budget even further than the recently unelected Governor Corbett was not willing to do.

Just recently the Independent Fiscal Office proclaimed that our revenue deficit was only 1.8 billion. Regardless, Pennsylvania is not the Federal Government, our beloved Commonwealth is required by law to have a balanced budget.

So whether Governor is successful in the broad sweeping changes his budget calls for or whether the General Assembly is successful in stopping him one thing is ultimately clear.

Taxes will go up. Don’t know which ones or how much. Taxes will go up.

by Nello Giorgetti

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Highlights of Governor Wolf’s Proposed 2015-2016 Budget

Budget Numbers

  • 2015-2016 budget proposal: $29.884 billion.
  • Most of the tax revenue to come from the Personal Income Tax (40.8%) and the Sales and Use Tax (31.1%).
  • The largest proposed expenditures would be for Human Services ($11.9 billion), Education ($10.1 billion), Corrections ($2.3 billion), and Treasury ($1.2 billion).
  • Federal funds that contribute to the total operating budget of the state would be $27.9 billion.

The following have been proposed as part of Governor Wolf’s 2015-2016 budget plan.

Government Savings and Efficiency

  • Establishes GO TIME (Governor’s Office of Transformation, Innovation, Management, and Efficiency)–an initiative designed to save taxpayers more than $150 million in the next year.
  • Merges the Department of Corrections with the Board of Probation and Parole to eliminate duplicative administrative oversight and provide better outcomes after offenders return to the community.
  • Re-integrates Medicaid into a single delivery system with a goal of realizing $500 million in additional state savings next year.
  • Allows Pennsylvania to enter into Pay for Success projects (also known as Social Impact Bonds) in five areas: 1) early childhood care and education; 2) education, workforce preparedness, and employment; 3) public safety; 4) health and human services; and 5) long-term living and home-and community-based services.

Liquor Store Modernization

  • Modernizes the liquor delivery system to make it easier and more convenient for customers by including Sunday hours, identifying the most convenient locations for customers, and establishing competitive pricing.

Pension Reform

  • Provides for pension investment reforms: reducing management fees and over reliance on high-risk investment strategies.
  • Eliminates “double dip” payments to charter schools in the Public School Code.
  • Guarantees that all actuarially required employer (meaning the government) pension obligations are paid in full.
  • Builds on the pension changes of 2010 (Act 120 of 2010).
  • Establishes a restricted account to ensure that all future employer obligations are paid in full.
  • Refinances a portion of the unfunded liability of the Pennsylvania State Employees’ Retirement System (PSERS) through the issuance of a $3 billion bond (which would be paid for by increased profits from the state liquor store system beginning in FY 2017-2018).
  • Realizes new revenues through the modernization of the current state-run wine and spirits system that would be allocated to school districts to reduce their pension debt.

Tax Changes

  • Provides for the complete elimination of the Capital Stock and Franchise Tax, effective January 1, 2016.
  • Provides for a reduction of the Corporate Net Income Tax from 9.99% to 5.99% in FY 2015-2016; within two years, the rate would drop to 4.99%.
  • Requires combined reporting for corporate taxpayers; companies would file a single return for all subsidiaries at the state level.
  • Decreases the cap on net operating losses from $5 million or 30% of income to $3 million or 12.5% of income.
  • Provides for $3.8 billion of property tax relief effective in the 2016-2017 school year– paid for by an increase in the Personal Income Tax to 3.7%, an increase in the Sales and Use Tax by 0.6 percentage points (to 6.6% statewide), and the elimination of certain exemptions under the Sales and Use Tax (commonly referred to as broadening the base of this tax); this property tax relief incorporates $600 million in revenue from gaming that is already dedicated to property tax reduction.
  • Provides for a severance tax on natural gas extraction to help finance new debt for publicly financed economic development initiatives and for the Pennsylvania Education Reinvestment Act, which would be established to finance the education spending provided for in the governor’s budget plan.
  • Institutes a 1.25% Bank Shares Tax, retroactive to FY 2013-2014.
  • Increases the Cigarette Tax by $1.00 per pack effective October 1, 2015.
  • Imposes a tax on all other tobacco products at 40% of the wholesale value of these products (effective October 1, 2015).

Public Financing for Economic Development Programs and Projects (includes transportation and water and sewer infrastructure)

  • Provides $5 million for a new initiative that combines the Industrial Resource Centers with technological advances of higher education.
  • Provides a $5 million tax credit to manufacturing companies (this tax credit would be funded through the elimination of “under-performing” tax credits).
  • Provides $100 million to the Pennsylvania Industrial Development Authority.
  • Provides $250 million to Business in Our Sites for site development, business expansions, and business relocations.
  • Provides a $1 million increase for World Trade PA.
  • Provides a $2 million increase for Marketing to Attract Tourists.
  • Includes a $1 million increase in Marketing to Attract Business.
  • Includes a $25 million increase for PA First—to facilitate job creation through Opportunity Grants, Infrastructure Development, and Customized Job Training programs.
  • Provides a $15 million increase in Keystone Communities for Main Street, Elm Street, and Core Communities Development projects.
  • Provides an additional $11 million for the Infrastructure and Facilities Improvement program.
  • Includes $775,000 to preserve Pennsylvania’s military communities (Base Realignment and Closure).
  • Provides a $4 million increase to Public Television Technology.
  • Includes $15 million for a Mixed Use Development Program through the Pennsylvania Housing Finance Agency.
  • Supplements revenue generated by Act 89 of 2013 (transportation funding) with $145 million in bonds scheduled to be issued in FY 2014-2015 under Act 89 of 2013.
  • Leverages more than $500 million through the issuance of PennVEST revenue bonds to address deteriorating municipal water and sewer systems.

Public Financing for Energy Projects

  • $30 million for Combined Heat and Power (Cogeneration).
  • $20 million for Wind Power.
  • $20 million for Green Agriculture.
  • $30 million for the Pennsylvania Energy Development Authority.
  • $25 million for “Last Mile” Natural Gas Distribution Line Development.
  • $50 million for PA Sunshine (solar investments).
  • $50 million for Energy Efficiency.
  • $100 million for Technology Investment.

Basic, Special, and Early Childhood Education

  • Provides for a $400 million increase in the Basic Education Subsidy.
  • Includes a $100 million increase in the Special Education Subsidy.
  • Includes a $120 million increase in early childhood education for additional enrollment in Pre-K Counts and the Head Start Supplemental Assistance Program.
  • Includes a new Basic Education Formula that contains four goals: 1) adequacy, 2) equity, 3) predictability, and 4) accountability.
  • Includes accountability measures that address academic and fiscal performance in schools.

Charter Schools

  • Sets the regular education tuition rate for cyber charter schools at $5,950.
  • Applies the formula recommended by the Special Education Funding Commission to cyber charter schools.
  • Makes permanent in law the policy of stopping charter and cyber charter schools from being paid twice for the same employee pension costs.
  • Includes a requirement for an annual reconciliation whereby charter and cyber charter schools would refund money to their sending school districts if the charter school’s audited expenditures were less than its tuition revenue.

Higher Education and Workforce Development

  • Provides $15 million to support and modernize career and technical education.
  • Provides $5 million for Career and Technical Education Equipment grants.
  • Provides $9 million from Pennsylvania Higher Education Assistance Agency (PHEAA) proceeds to re-establish the state’s Dual Enrollment Grant Program.
  • Provides $8 million for career counselors for middle and high school students.
  • Provides a $15 million increase to community colleges.
  • Provides a $45.3 million increase to the Pennsylvania State System of Higher Education.
  • Provides an $80.9 million increase to State-Related Universities (i.e., Penn State University, Temple University, the University of Pittsburgh, and Lincoln University).
  • Calls on community colleges and the universities of the State System of Higher Education to freeze tuition during the next academic year.
  • Recommends $7.5 million from PHEAA proceeds for STEM—Science, Technology, Engineering, and Math.
  • Provides a $10 million increase to offer additional scholarships under the Ready to Succeed program.
  • Provides a $5 million increase for grants to independent colleges and universities (known as Institutional Assistance Grants).
  • Provides $8.5 million from PHEAA proceeds to expand the state’s loan forgiveness program for primary care physicians in medically underserved areas.
  • Provides a $10 million increase for Industry Partnerships.
  • Provides $8 million in funding for the Workforce and Economic Development Network of Pennsylvania (WEDnetPA).
  • Provides a $1.2 million increase for the Pennsylvania College of Technology and an $863,000 increase for the Thaddeus Stevens College of Technology.
  • Provides an increase of $466,000 for scholarships to graduates of Lincoln and Cheyney Universities who pursue graduate and professional degrees at state-related universities.
  • Provides a $475,000 increase for grants to offset tuition and other expenses for gifted students who attend Cheyney University.
  • Provides an increase of $4.6 million for Adult and Family Literacy programs.
  • Provides a $5 million increase for Vocational Rehabilitation.

Health Care

  • Expands Medicaid into a single consolidated system.
  • Expands coverage of the Children’s Health Insurance Program (CHIP) to an additional 15,881 children.

Drug and Alcohol Treatment

  • Provides a $2.5 million increase to Behavioral Health Services.
  • Provides a $5 million increase to the Department of Drug and Alcohol Programs to address heroin use and opioid addiction throughout the state.

Public Safety

  • Funds four classes of Pennsylvania State Police Troopers (or 350 new cadets).

Care for Vulnerable Citizens

  • Expands home-and community-based long-term care by providing an additional $31 million to the Department of Human Services (previously called the Department of Public Welfare) and $7.3 million to the Department of Aging to allow more individuals to obtain care in their homes.
  • Provides for the implementation of managed long-term care within three years.
  • Implements an online home care registry for workers to find jobs in the field and for consumers to find competent care.
  • Provides $45.9 million to reduce waiting lists for individuals with physical and intellectual disabilities (and expands services for these individuals).
  • Provides an additional $19.3 million for home-and community-based care for individuals with intellectual disabilities and autism (and includes $12.8 million to fully annualize the 2014-2015 program expansion).

Labor and Employment

  • Provides for an increase in Pennsylvania’s minimum wage from $7.25 to $10.10 and ties it to inflation.

Note: The information contained in this document is from public materials made available by the Pennsylvania Office of the Budget.   This document serves as a condensed summary of the provisions of Governor Wolf’s proposed budgetIt is not an official source on the Governor’s proposed 2015-2016 budget.

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Nello Giorgetti talks Budget with KDKA’s Jon Delano

On Thursday, December 5, 2014, Governor-Elect Tom Wolf was in town to support Allegheny County Executive Rich Fitzgerald’s bid for re-election.  During Wolf’s visit he made it clear that there was a $2 billion hole in the State’s budget.  Jon Delano sat down with Nello for his opinion on the State’s budget and what options there possibly could be to fix this problem.  See link from CBSLocal:  http://pittsburgh.cbslocal.com/video/10917943-gov-elect-wolf-visits-allegheny-co/

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Governor Corbett approves budget for Pennsylvania’s 2014-2015 fiscal year

On July 10, 2014, Governor Corbett approved the budget for Pennsylvania’s 2014-2015 fiscal year after announcing that he had decided to line item veto certain funding for the state legislature. The budget provides for $29.1 billion in state spending for this new fiscal year. Budget highlights include:

  • No increases in broad-based state taxes (e.g., Personal Income Tax, Sales and Use Tax).
  • No severance tax on the extraction and production of natural gas in the Marcellus Shale.
  • The continuation of economic development tax credits, including the Film Production Tax Credit.
  • The continued phase out of the Capital Stock and Franchise Tax.
  • $10.5 billion for K-12 education.
  • A $20 million increase in special education.
  • A $10 million increase for PlanCon, a process whereby a school district seeks reimbursement from state government for a major construction project undertaken by the school district.
  • $327.69 million in funding for early childhood education, including a $10 million increase for Pre-K Counts.
  • A $3.5 million increase in funding for community colleges.
  • $5 million for the newly established Ready-to-Succeed Scholarship, which provides merit-based scholarships to students who demonstrate academic achievement and come from families with household income of less than $110,000.
  • $100 million for the newly created Ready-to-Learn Block Grants to support academic achievement with flexible uses that include the following: uses allowable under the Accountability Block Grant; establishing, expanding, and maintaining kindergarten and Pre-K programs; hybrid learning; and curriculum alignment.
  • Requirement that the Environmental Quality Board regulations differentiate between conventional oil and gas wells and unconventional gas wells.
  • Elimination of the state’s pension reimbursement payments to charter and cyber charter schools.
  • No public pension reform. However, pension reform may be taken up by the state legislature in the fall.
  • No liquor store privatization or modernization.