On 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 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.
The 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.
In 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.