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Shapiro’s Budget Would Balloon Deficit to $6 Billion Plus, Watchdog Says

Hold on to your wallet.

The Commonwealth Foundation has come out with another critique of Gov. Josh Shapiro’s proposed $48.3 billion 2024 budget. The organization says it will lead to a $2,000 tax increase for a family of four after state surpluses are drained.

Officials at the state’s free-market think tank say, if passed, this budget would expand Pennsylvania’s structural deficit to more than $6 billion by 2028. And that would bring significant tax increases, according to its research.

The budget includes $4.5 billion in new spending initiatives. It would take the surplus from $7 billion to less than $4 billion, a structural deficit of more than $4 billion for revenue versus spending, a think tank spokesman said. The structural deficit would drain the fund balance, eventually requiring a tax increase.

Shapiro would use the state’s general fund balance and then move on to the $7 billion Rainy Day Fund. However, state law says Pennsylvania’s Rainy Day Fund reserves “shall not be used to begin new programs but to provide for the continuation of vital public programs in danger of being eliminated or severely reduced due to financial problems resulting from the economy.”

Commonwealth officials said that Shapiro’s budget flouts this statute.

“Gov. Shapiro’s deficit projections seem deliberately misleading,” said Commonwealth Foundation Senior Vice President Nathan Benefield. “Pennsylvania has lost nearly 65,000 residents to other states over the last two years—working adults are leaving the commonwealth. Yet, the Shapiro administration believes the economy will surge and state revenues will exceed the IFO’s calculations by more than $850 million in fiscal years 2024–25 and 2025–26. The governor’s math doesn’t add up.”

Shapiro’s budget projections also put a rosy spin on revenue growth while underestimating spending increases. But the Pennsylvania Independent Fiscal Office (IFO) calculations paint a different picture.

Rep. Seth Grove (R-York), who chairs the House Appropriations Committee, noted the surplus and Rainy Day Fund boost the state’s bond rating; if those are depleted, the bond rating would fall, increasing the cost of borrowing. The state would need to borrow from other entities to pay its obligations, whereas now it borrows from the Treasury. The current Rainy Day Fund is saving taxpayers $100 million in long-term debt costs, Grove said.

Reacting to the governor’s budget estimates, state Sen. Jarrett Colemen (R-Breiningsville) said, “The legislature should absolutely use the IFO’s revenue projections when determining what funds will be available. What’s more concerning is that even with the overly optimistic revenue projections offered by the governor, his spending levels would drain the Rainy Day Fund and all other reserves by the middle of 2027. Spending at that pace is completely irresponsible.”

Despite the governor’s promises, Shapiro’s budget outlook projects no increases in basic education funding after fiscal year 2024–25. This means the budget deficit will be about $4 billion higher than his forecast, Commonwealth officials claim.

Manuel Bonder, a spokesman for the governor, defended Shapiro’s budget and disparaged the Commonwealth Foundation.

“Gov. Shapiro is focused on getting things done and creating opportunity for Pennsylvania families – not on poorly written press releases from special interest groups,” said Bonder.

“Gov. Shapiro doesn’t believe it should be a badge of honor for politicians to tax Pennsylvanians more than needed, just for over $14 billion to sit in a bank account in Harrisburg — the situation we find ourselves in now. The facts are clear: the governor’s budget is balanced, cuts taxes – doesn’t raise them – and even if every single thing in this proposal were enacted, we would still have an $11 billion surplus at the end of the day,” Bonder said.

Benefield disagreed.

“Pennsylvanians can’t afford the thousands more in taxes that Shapiro’s budget would heft upon them,” said Benefield. “Nor can they afford an administration that uses creative accounting to mask the true cost of the governor’s spending proposals. Our families deserve better than runaway government spending, increased deficits, depleted reserves, and tax hikes on working families.”

View the Commonwealth Foundation’s fact sheet here.

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WARD: PA Senate Republicans Have Your Back

There was no one more surprised by Gov. Shapiro’s last-minute about-face on the state budget than me. Senate Republicans are not ticked off or sulking, we are shaking our heads, trying to determine the best way to move forward with a governor who has lost our trust.

Gov. Shapiro campaigned on school scholarships for low-income children trapped in the bottom 15 percent of failing schools. He proclaimed “every child of God” deserved a chance at a good education. It was a priority for him so long as it did not take money away from public schools. Senate Republicans met that challenge and crafted a budget that provided historic increases to basic education, including new funding for K-12 scholarships through the Pennsylvania Award for Student Success (P.A.S.S.).

Negotiation is inherently built into the lawmaking process and is part of the foundation that government sits upon. Throughout any negotiation, there are moments where a handshake, a head nod, or even a memo indicates an agreement. A person’s word means something until it doesn’t, by failing to uphold their end.

Leading up to the Senate approval of the General Appropriations Budget (HB 611) there were many of these moments. The Senate passed HB 611 in good faith, but in a classic “bait and switch,” Gov. Shapiro waited until the bill was passed and then announced he would line-item veto P.A.S.S. while also keeping all his negotiated wins pending House approval of the bill. Subsequently, the House did pass the bill. The Senate has no ability to renegotiate HB 611 since it passed both legislative chambers.

I understand the importance of getting the General Appropriations Budget to the governor before the school year begins, as well as the funding to organizations. Pennsylvanians are counting on us to finish this process and we will by calling the Senate back before the end of August to sign HB 611. It will be sent to the Governor allowing Treasurer Stacy Garrity to disperse the monies where it is needed in a timely manner.

It’s important to note, HB 611 is not a complete budget. Signing this bill only provides funding to approximately 75 percent of programs which includes schools and counties. The remaining 25 percent still need some form of legislation to authorize their expenditures. The Governor’s legal team noted this in the governor’s justification to veto P.A.S.S. funding, but there are many more programs affected. Senate Republicans are currently working through what these legislative approvals will look like.

The final 25 percent will require negotiation, and we will work diligently to do our part. Hopefully, our House counterparts will report back before their scheduled return of September 26th. If they return early, the House is evenly divided, along party lines, 101-101. Hopefully they will put politics aside and return sooner to finalize the remaining parts of this budget.

The quickest and best solution is for Gov. Shapiro to simply keep his word, not only to us, but to the kids trapped in failing schools. The opportunity still exists, but it is becoming clearer that Gov. Shapiro isn’t interested. Words mean something, but actions mean more. The time to act is now for kids stuck in failing school districts.

 

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CHRISTOPHER: PA Food Assistance Programs Need Legislative Support

Pennsylvania’s charitable food network is overwhelmed, especially in Philadelphia’s collar counties, a region often associated with affluence rather than hunger.

Demand for food assistance remains above pre-pandemic levels, and new challenges continue to put a strain on food banks’ operations.

Higher fuel prices and inflationary costs are cutting into the limited resources food banks have to operate, especially amid years of chronic underfunding.

The rising cost of food is a significant hardship not only for individuals but for services like ours that are trying to meet the growing demand of families who continue to struggle to put food on the table.

So, it wasn’t lost on any of us who dedicate ourselves to feeding hungry Pennsylvanians when the House of Representatives recently passed its version of a proposed budget with dramatic increases in the state’s food assistance programs.

Although it’s just one step in the complex process of crafting a final state spending plan, the legislative action proved our state leaders might finally recognize the epidemic that hunger has become across the commonwealth.

In southeastern Pennsylvania, for example, charitable food organizations are registering about 2 million visits each month. More than 4,000 low-income and homebound seniors now receive monthly food boxes via delivery. Another 3,000 seniors are eligible but can’t get service because funding isn’t there.

In Delaware County specifically, the number of monthly visits totals nearly 250,000. Four hundred seniors are waiting for food delivery services.

Under the House’s proposed budget, funding would increase for two of the state’s most important anti-hunger programs — the State Food Purchase Program (SFPP) line item would jump by more than $4 million to $24.1 million, and funding for the Pennsylvania Agricultural Surplus System (PASS) would nearly double, from $4.5 million to $7.5 million.

SFPP remains a lifeline for food banks across Pennsylvania, helping all 67 counties purchase and distribute food to low-income families and seniors. SFPP also helps food banks access federal food commodities and finance transportation and infrastructure improvements.

Pennsylvania’s agriculture sector, farm communities and food insecure residents all benefit from PASS, which redirects millions of pounds of Pennsylvania-grown agricultural products that might otherwise go to waste to organizations that provide nutritious meals.

Also, for the first time ever, the budget would provide $1 million to the Senior Food Box Program — a need that is clearly demonstrated, especially as our state population continues to age.

Hunger-Free Pennsylvania is the single largest provider of meals to older Pennsylvanians through the program, which we administer on behalf of the Department of Agriculture through our network of food banks serving all 67 counties.

Eligible seniors can choose to receive their monthly box via pick up, drive-through, or delivery from a program partner, including senior apartment complexes, senior community centers, and food pantries, or even DoorDash. But as much as the program has grown over the years, it barely touches a fraction of those eligible.

The House spending plan also would keep $500,000 to support the cost of distributing The Emergency Food Assistance Program (TEFAP) commodities to counties, as well as the $1 million for the Emergency Food Assistance Development Program.

Hunger is something that knows no boundaries, no political affiliation.

In Pennsylvania, nearly 1 in 10 residents faces food insecurity. One in 8 children are food insecure. Hundreds of thousands of senior citizens qualify for the state’s meal delivery program but don’t receive that aid because of financial constraints.

There isn’t a single county in Pennsylvania without a family experiencing food insecurity. It’s a growing problem — especially in southeastern Pennsylvania — that demands a response of equal ambition, and this draft spending plan does that.

Passage of the House measure is among the first steps in crafting a spending plan. The legislation now goes to the Republican-controlled Senate, which has its own ideas. The administration and General Assembly have until June 30 to work out a final budget before the state’s fiscal year ends.

We recognize that negotiations are ongoing in these final days, and we understand that everyone at the negotiating table has different policy priorities. But we hope everyone can find consensus in making sure Pennsylvania does all it can to fight hunger and ensure its most vulnerable residents have access to healthy, nutritious food.

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PEZZANO: Let’s continue to support long-term care in Pennsylvania

Thanks to the bipartisan leadership of the Pennsylvania General Assembly and Gov. Tom Wolf in the last state budget, Pennsylvania took a good first step in support of Pennsylvania’s long-term care industry. In total, Pennsylvania’s 2022-23 budget invests more than $600 million in state and federal funds so that it can help care for one of the nation’s largest senior populations.

So often we hear how government leaders won’t work together or how they place politics above good public policy. This is not one of those stories. Rather, it’s an example of how government, industry and labor can come together to improve care for older adults.

It’s important to understand what brought us to this point. For far too long, nursing homes struggled to keep dedicated workers, in part because Medicaid funding remained flat for years, making it impossible to keep up with even basic inflationary costs. The pandemic only made this worse. Pennsylvania has lost nearly 1,000 skilled beds over the last four years (source: CMS.gov), and a LeadingAge PA member survey showed the number of nursing beds pulled offline grew fourfold from 2019 to 2021. In addition, 14 nursing homes have closed entirely since 2020

The human toll is much worse than the statistics. With closures and loss of beds, where have these older residents been receiving their care? Unfortunately, some families have been forced to find care in an unfamiliar location, farther away from home. This undoubtedly led to social isolation for residents and feelings of depression and helplessness by their loved ones. As a speech pathologist and post-acute care clinician, I know too well the impact that has on one’s mental state and overall health.

That’s why this tremendous effort by government, industry and labor comes at such a critical time.

This $600-million infusion will begin to allow aging services providers to compete with other industries for skilled employees. It also helps to create some breathing room as long-term care communities continue to deal with the pandemic. The crisis is not over for aging services. Providers continue to bear the financial and operational burden of adhering to extensive infection prevention protocols, managing the cost of personal protective equipment and supplies, maintaining onerous and duplicative reporting, and continuously right-sizing staff and other resources based on the latest influx of cases. Now that the virus is becoming a part of everyday life and the threat has lessened, it’s time to rethink and reverse the rules and regulations that are no longer necessary and inhibit residents’ quality of life.

This new funding is a good start in the right direction, but there’s much more that needs to be done legislatively to help address ongoing challenges.

Early in the pandemic, the government provided a pathway to ease staffing burdens by creating the temporary nurse aide (TNA) program; however, this program ended in June following the termination of the federal waiver. Congress should pass legislation (H.R. 7744) to reinstate and extend the TNA waiver. In the interim, the state should apply for a federal waiver to extend the Oct. 6 testing deadline in light of testing capacity issues, which are making it difficult for these caregivers to become certified nursing assistants (CNAs).

We also need to make sure our current CNAs are given opportunities to advance, and that providers can remain competitive with other industries. Lawmakers can help communities by providing greater flexibility for CNAs to move up the career ladder, including allowing qualified nurse aides to train to become medical administration technicians. In addition, transparency and oversight of temporary staffing agencies and pricing protection are needed to ensure that older Pennsylvanians have access to needed care.

Pennsylvanians should be proud of the work accomplished in the state budget on behalf of long-term care. It will help improve the lives of countless older adults and their loved ones. But let’s not stop now. Too much important work remains in ensuring Pennsylvanians have access to these critical supports.

As we just saw, by working together – anything is possible.

 

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Ciresi, Neafcy Face Off Again in House 146 District

When they faced off two years ago in House District 146, incumbent state Rep. Joe Ciresi (D-Royersford) easily bested his GOP opponent, Thomas Neafcy by about 5,000 votes.

But the politics of 2022 are very different. President Joe Biden is polling in the low 30s, gas prices are soaring, and polls show voters are ready for a change. Enough change to flip this district? That is what Neafcy is hoping.

Thomas Neafcy

Ciresi, who is seeking a third term, is quick to note he is willing to buck trends in his own party.

“I know some of my colleagues get upset with me because I’m not progressive enough at times. I am progressive, but I look at a different way to get there. I don’t believe that tomorrow everything should be renewable. I believe it all needs to be renewable, but you need to buy into that.”

One thing both candidates agree on is the economy is the most pressing issue.

Republican Neafcy, a former Limerick Township supervisor, blames Biden’s policies for a historic surge in inflation that has raised the price of gas, food and rent.

That is squeezing Pennsylvanians, especially families and retirees on fixed incomes, said Neafcy, who secured the GOP nod through a write-in campaign in the May primary.

“We’re heading into a recession. People on fixed incomes or retired are scared to death,” said Neafcy, who counts himself among those who are worried after retiring following more than 30 years working for PECO. “We’re in terrible shape under President Biden. Inflation’s out of control. Gas prices are out of control. Jobs aren’t what they should be. We’re in trouble and it’s going to hurt for a while.”

Ciresi pointed to the state’s $42.8 billion spending plan that allocated more than half a billion dollars in additional spending for K-12 education as providing some relief for taxpayers.

Nearly $250 billion is going to help the state’s 100 poorest districts, the Associated Press reported, along with  $140 million in direct property tax relief for residents through a one-time bonus rebate program proposed by Gov. Tom Wolf (D).

“We all know the economy is a major issue,” Ciresi said. “And it continues to be an issue. This budget that just came out helped a lot of people.”

After giving up his supervisor seat last year following decades in public service, Neafcy said was drawn into the race after the Montgomery County GOP failed to put up a candidate in the primary. He said he felt a responsibility to step up after serving virtually every level of local government in Limerick Township.

“I have one philosophy, and I’ve always kept it. I will give you an honest answer,” Neafcy said. “You may not like it, but I’ll tell you the truth. You can take it to the bank. I don’t play that game. I believe in honesty and integrity.”

Ciresi, a former Spring-Ford School Board member, comes from a plain-speaking Italian family whose influence is obvious in how he carries himself.

He littered his interview with DVJournal with colorful language and jokingly told a childhood story of how his mother brusquely laid into an irritated motorist who honked at them while they were broken down at a light.

He hopes his straight-talking ways and commitment to doing the “right d**n thing” no matter what appeals to voters who are disillusioned with Democrats because of Biden’s unpopularity.

Neafcy attacked his opponent’s record on education, claiming he is a “special-interest” candidate aligned with his biggest donors, including the teachers unions.

Neafcy supports school choice and was critical of legislation that Ciresi sponsored aimed at changing charter school laws and the way schools are funded.

“He’s trying to defund charter schools,” Neafcy said. “He’s not working for the kids. He’s working for the teachers’ unions.”

Ciresi, who serves on the House Education Committee, has been critical of the state’s funding formula, particularly an antiquated “hold harmless” policy, around since 1992 to ensure school districts aren’t funded less than they were in previous years. He believes it created steep imbalances among schools with shrinking or increasing student enrollment.

“It was a good idea at one point. It doesn’t work,” Ciresi said. Growing school districts raised property taxes to offset the state’s underfunding. This year’s budget includes a $225 million increase for Level Up aimed at addressing the iniquities, he said.

 

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