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A First Time for Everything

By Hannah Walsh, Associate Director, Legislative Affairs

With Pennsylvania’s state budget for the 2015-2016 fiscal year still only partially enacted, you may be wondering how this unfinished business will affect next year’s budget cycle or what in general the impact will be.

Typically, the process of enacting the annual state spending plan gears up in February with the Governor’s official budget address to the General Assembly. This is the Governor’s opportunity to deliver his “wish list” of policy and funding objectives for the coming year. The Governor’s proposed budget is also seen as the starting point for the legislature, which in subsequent weeks will hold a series of public hearings with the Administration and various departments’ officials to closely examine their spending and funding needs.

Despite the fact that the current year’s budget remains unresolved, Gov. Wolf is scheduled to deliver his second state budget address to a joint session of the House and Senate next Tuesday, Feb. 9. Both chambers have scheduled budget hearings over the course of three weeks during late February and early March.

Now, my personal state-government experience only goes back about eight years, but I think even those with far more seniority than me could probably say that this is the first time that they’ve seen a governor present his customary annual state budget address while the prior year’s budget remains unfinished. But, then again, if everything is scheduled to go on like normal, does it even matter?

To some, the answer is yes, very much so. Gov. Wolf’s partial veto of a $30.2 billion spending plan the legislature sent him in December – six months past its due date – left big holes in funding for things like public education, agricultural programs, corrections, and state-related universities. The partial budget veto also cut supplemental Medicaid payments to rural hospitals, burn units, and childbirth centers across the state. Here is more about what funding was authorized in December.

So with all of these things left up in the air, what will Wolf say in his Tuesday address?

Last year, legislators openly scoffed at the Governor’s 2015-2016 budget proposal, which would have increased overall state spending by 16 percent to boost funding for public education, raise the minimum wage, and cut property taxes for Pennsylvania homeowners—initiatives that arguably sound great in concept, but would have relied on increases in the state’s personal income tax and sales tax, an expansion of the sales tax base to cover more goods and services, and a new tax on natural gas drillers.

It’s expected that during Tuesday’s budget address, Gov. Wolf will call for an additional $200 million in new spending for K-12 education in 2016-2017, building on the yet-to-be-approved $377 million increase in school funding that he still hopes to get in the current fiscal year. Presumably, his spending plan and proposed funding increases will have to be paired with a renewed call for the tax increases that were ultimately not implemented in the current year.

If legislators weren’t keen on tax increases last year, one would expect them to be even more firmly opposed this year, when all House members and half the Senate are up for reelection. So far, early reactions are predictably in tune with last year.

So, is the budget gridlock in 2015-16 a sign of things to come? Should we expect the 2016-17 state budget to be another bruising battle between the Senate, House and Governor? What will Gov. Wolf say on Tuesday about the elephant in the room—the unresolved 2015-2016 state budget? And, with such partisan fissures progressing well into the new year, what will the Governor and the General Assembly be able to accomplish when it comes to other legislative priorities?

Whatever ends up happening—your guess is probably as good as mine— it will largely dictate what we can do legislatively in the coming year. Like anything else, PAMED priority issues such as prior authorization reform, streamlining of the credentialing process, and expanding the use of telemedicine are at the mercy of partisan fissures. But, as with anything else, advancing these issues will be a step-by-step process, and one that is more akin to a marathon than a sprint.

Arguably, this is what one should expect when we have elected a divided government.


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