Don’t Miss the March 3 PSCFO Meeting!

Cornucopia 2012 200x167The March 3 Council program will feature both Republican and Democratic Chairs of the House and Senate Agriculture & Rural Affairs Committees to discuss what agricultural issues are likely to come up before the General Assembly.

In addition, PA Agriculture Secretary Russell Redding will present some of the Wolf Administration’s thinking on how PA Agriculture jobs and workforce development are central to Pennsylvania’s total economic well-being.

March 3 is also the day when Governor Wolf presents his State Budget for the fiscal year beginning July 1, 2015 to the General Assembly so expect plenty of buzz about the Department of Agriculture budget.   The PSCFO Board truly hopes you will attend this informative and useful session.

Click here for more information.

State Tax Revenues Continue Upward Trend

Graph-UpThe PA Department of Revenue released figures showing January 2015 General Fund revenue at $2.4 billion, bringing year to date collections $360.4 million over estimate.  Breakdown showing year to date estimates are: Sales Tax $66.6 million more than anticipated; Personal Income Tax $400,000 over estimate; Corporate Tax Revenue $162.6 million more than anticipated; Inheritance Tax revenue $81.5 million more than anticipated; Other General Fund taxes (tobacco, malt beverage, liquor and table games) showed $23 million above estimate.  On the negative side was the Real Estate Transfer Tax which came in $28.4 million below estimates.

Agriculture Survives State Budget Woes

budget paThe Pa. Department of Agriculture survived the state budget gauntlet in Harrisburg for Fiscal Year 2014-15 which began July 1. PSCFO wrote legislative leaders June 29 to say Many of PSCFO’s sixty-plus agricultural organizations are directly affected by the staff capacity at PDA. In this case, a modest increase will stabilize the PDA budget and allow it to meet its directives from the General Assembly.” Following are a number of PDA budget line items compared with the last fiscal year.

 

Line Item                    2014-15 Enacted Budget        2013-14 Available                Change

General Gov’t Operations       25.269 million                       22.703 million                     +11.3%

Ag Excellence                               1.1 million                               600,000                     +83.3%

Farmers’ Market Coupons        2.079 million                         2.079 million                       same

Ag Research                                  787,000                                787,000                       same

Promotion, Ed. & Exports               250,000                                196,000                     +27.6%

Hardwoods Promotion                   350,000                                350,000                        same

Livestock Show                             177,000                                177,000                        same

Open Dairy Show                           177,000                                177,000                        same

Youth Shows                                 140,000                                140,000                        same

State Food Purchase              17.438 million                        17.438 million                        same

Marketing & Research                     494,000                                494,000                        same

Nutrient Management               2.714 million                          2.714 million                        same

Conservation Districts                     869,000                                869,000                        same

Land Scrip Fund                      46.237 million                        46.237 million                       same

(NOTE: This is not what Penn State Ag Research and Extension was budgeted for last year.  Comparison is for the available funds, not the budget-approved amount.)

PA Preferred                                   550,000                                550,000                        same

UPenn Veterinary                           28 million                               28 million                        same

UPenn Infectious Disease                 261,000                                261,000                        same

http://www.portal.state.pa.us/portal/server.pt/community/current_and_proposed_commonwealth_budgets/4566

What Governor Vetoed in the 2014-2015 State Budget

budget paOn July 10, Governor Corbett signed the new state budget into law but expressed dismay in that the General Assembly did not pass pension reform, something he said had to be done.  To send a message, he vetoed $65 million in monies out of the funds allocated to the General Assembly.  He also vetoed items on which the media did not report:

  • Dept. Environmental Protection $150,000 (environmental program management)
  • Dept. Environmental Protection $700,000 (sewage facilities planning grants)
  • Treasury Department $45,000 (general gov’t operations)
  • Dept. Community & Economic Development $250,000 (financial institution grants)
  • Dept. Community & Economic Development $300,000 (Intergovernmental Cooperation Authority)
  • Dept. Conservation & Natural Resources $$500,000 (parks)
  • Labor & Industry $250,000 (general government operations)
  • Civil Air Patrol $100,000
  • Dept. General Services $5 million (rental, relocation and municipal charges)
  • Reduce Machinery & Equipment Loan Fund from $100 million to $85 million
  • Small Business First Loan Fund (for agriculture, tourism, manufacturing) from $100 to $95 million

It’s High Noon Budget Time

budget paIt’s crunch time to enact the State Budget for the fiscal year beginning July 1, 2014. It’s all about money since revenue projections for this year were not met, $108 million short in May for example.

Governor’s Budget Cuts Many Ag Areas

Agriculture has a huge stake in the outcome given numbers of specific line items not included in Governor Corbett’s original proposal: PA Preferred, Centers for Dairy and Beef Excellence, agricultural research funding in the PDA budget – adequate funding for Penn State’s Cooperative Extension/Agricultural Research is another important issue.

PDA Cuts Not Restored

The initial vehicle for the Budget is House Bill 2328 (Adolph-R-Delaware) which was reported out of the House Appropriations Committee June 9 and re-referred to the House Rules Committee June 11. It reinstates many of the proposed Agriculture cuts but does not include the Governor’s request for an increase in PDA’s General Government Operations budget. Senate vehicle is Senate Bill 1431.

General Assembly Resumes in June

Pa-capitol-300x250The PA General Assembly is readying itself for the June state budget gauntlet where a balanced budget must be signed into law per the constitutional deadline of June 30. To see Governor Corbett’s original proposal for agricultural spending, please refer to the Pa. Budget Office website. PA Department of Agriculture’s budget proposal begins at E8.1 (on page 387). The Farm Show budget is found at C5.1 (page 167). Click here to view PDA’s budget.

Funding for General Government Operations would increase from $22.7 million in available funds now to a proposed $24.738 million for FY 2014-15. This increase does not mean expanded programs. Rather, much of it will go towards meeting increased employee benefits (health insurance) costs.

However, the Corbett budget proposal eliminates funding for numerous successful programs including PA Preferred, the Centers of Agricultural Excellence, Agricultural Research, Agricultural Promotion, Education & Exports, Hardwoods Research & Promotion, Animal Health Commission, Livestock Show, Open Dairy Show, etc.

IMPORTANT NOTE: The Corbett budget proposal (as with former Governor Rendell) treats these zeroed out line items as negotiating items with the General Assembly. It does not mean that agricultural advocates can rest because budgets have been restored in the past. Each budget year requires renewed advocacy so that those line items are not overlooked. The Farm Show Fund anticipates $415,000 in fees and licensing income, $4 million from the PA Race Horse Development Fund and Farm Show leasing income of $6.155 million.

Bleak Budget Forecast

budget paIn April, normally a good month in revenue collections, PA collected $3.4 billion in general revenue which was $328.3 million or 8.8% less than anticipated. YTD collections were $23.9 billion by April 30 or 1.7% below projections. This apparently does not take into account a recent court decision that reinstated PA’s share of Tobacco Settlement money.

There are two outcomes:

First, Governor Corbett is examining existing budgets to see where savings/cuts can be found so as to balance this year’s budget.

Second, June’s budget deliberations mean that some areas where he proposed increases such as in education may be in doubt as the state faces a new fiscal year even gloomier than this one.

Adding to the pain are warnings from those assessing Pennsylvania’s fiscal solvency that continued inaction on resolving the pension crisis means a credit downgrade for the Commonwealth.