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United Way Survey Uncovers Nonprofits’ Struggles

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Nearly 70% of the 800-nonprofit groups responding to the United Way of Pennsylvania’s budget survey report feeling the effects of state budget cuts in 2012, and some indicate the cuts have been going on for five years or more.  Nearly half of the groups also report feeling the pinch from federal budget streams.

At the same time, more than three in four of the human services agencies responding to the survey say the economic downturn has increased the demand for their services.

“Over a third of the responding organizations (35%) reported turning away individuals needing service, while another 21% revoked services from individuals due to a lack of funding,” explained United Way of Pennsylvania President Tony Ross. 

United Way of Lackawanna and Wayne Counties President Gary Drapek tells Radio PA the crisis extends beyond the human services agencies to the people they serve, and Butler County United Way Executive Director Leslie Osche is especially concerned about a group she calls the ‘invisible middle.’

“It’s the struggling young people and the struggling families that tend to get lost in the shuffle, and become somewhat invisible in this process, because they’re not necessarily those who are in nursing home care or in institutional care of some sort,” Osche explains.

Tony Ross recognizes that state policymakers may not be able to increase funding in these tough times, but he’s still urging them to stop the cuts to human services.  Another recommendation is to implement performance-based budgeting that funds the programs that work.

“In the long run we will be wasting more money because more services will be needed if we don’t start funding the preventative services to the level that we should,” Drapek says.

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What Would the Fiscal Cliff Mean for PA?

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The fiscal cliff is more than just a federal issue.  The automatic spending cuts called for in federal sequestration could mean $60-million fewer federal dollars for Pennsylvania next year, and that’s just half of this so-called cliff. 

Without Congressional action, a variety of tax increases will also take effect as of January 1st, which could raise a combined $600-billion dollars in federal revenue in 2013.

Those tax increases could have serious implications for the Pennsylvania economy.  “Pennsylvania comprises about 4% of US economic activity, so if we apportion that number to Pennsylvania, a very rough order of magnitude might suggest a tax increase of $22-billion dollars,” Independent Fiscal Office (IFO) Director Matthew Knittel explained on Radio Smart Talk.  “[That’s] a very rough order of magnitude and a worst-case scenario.” 

Knittel believes Congress will take some action by the end of the year, just not full action, so he says a more realistic economic impact on PA would be in the $8 – $20-billion dollar range.” 

The payroll tax cut alone would mean $5-billion fewer dollars for PA taxpayers.  “If one assumes that roughly 70% of that would have been spent, and roughly 40% would have been spent on taxable items, that tax increase suggests a roughly $70 – $80-million dollar reduction in sales & use tax revenues,” Knittel says. 

The potential impact of the fiscal cliff was included in the IFO’s recently-released Economic & Budget Outlook, which projects lackluster growth in the Pennsylvania economy.

House Panel Mulls Stronger School Library Policy

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Not all school libraries are created equal.  A State Board of Education study highlights the point.  While almost all schools have libraries and 95% have librarians, only 44% of those librarians are full-time.  “Many of the librarians are serving multiple schools within their districts,” says the University of Pittsburgh’s Dr. Mary Biagini, the study’s lead author.  “So students do not have access to a librarian, and sometimes not to the library, throughout their school days.”

The study, mandated by state lawmakers, also found dated and scarce collections at school libraries.  Dr. Biagini says state guidelines recommend $40 – $50-dollars being spent per student on library services, but almost 40% of school districts allocate just $1 – $10-dollars per student.  “The research shows that the higher the funding, the better those students do in reading and writing.”

The House Education Committee formally accepted the school library study at an informational hearing on Wednesday.  It also heard from advocates, who are promoting equal access to adequate school libraries.

While the State Board of Education study provides a snapshot of the 2010-2011 school year, the Pennsylvania School Librarians Association says more recent budget cuts have only made the situation worse.  “We found that an additional 198 schools eliminated or reduced their services from the previous year,” PSLA president Eileen Kern told the committee.

Despite 75-pages of guidelines, state law does not currently mandate dedicated funding, trained staff or even school libraries themselves.  Citing those facts, leaders of the Pennsylvania PTA also called for reforms that set standards for Pennsylvania public school library programs.

Before he adjourned the hearing, Education Chair Paul Clymer (R-Bucks) told the audience that his committee will be making strong school library recommendations when the new state budget is discussed.

“Keystone Works” to Launch This Fall

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Guidelines are being drafted for a new program called Keystone Works, which could help unemployed Pennsylvanians find a job more quickly.  “Keystone Works will provide an opportunity for the unemployed worker to receive training with a business while continuing to receive their UC benefits, at the same time incentivizing the employers to hopefully hire these unemployed individuals,” says Michelle Staton, deputy secretary for workforce development with the state Department of Labor & Industry.

The worker benefits by staying connected to the workforce, obtaining new skills and receiving job-specific training in a high-priority occupation.  Even if they are not hired at the end of the eight-week program, Staton tells us the new skills will make it easier to find work elsewhere.

The employer benefits because the program helps off-set the cost of training, and offers incentives of up to $1,500 for every trainee they hire.

The new state budget includes $2.5-million dollars to cover the cost of those incentives.  Staton says their goal is to train 2,000 workers in the first year of “Keystone Works.”  The Department of Labor and Industry will be developing a website specifically for individuals and companies interested in Keystone Works.

The statewide jobless rate currently stands at 7.5%.  July’s numbers are expected to be released later this week.

Corbett Pleased with Recent Bipartisanship, Eager for More

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While addressing upcoming talks of pension reform, on Radio PA’s Ask the Governor program, Tom Corbett emphasized that pensions are a bipartisan issue.  “There has been an outbreak of bipartisanship as far as I am concerned, not only in Harrisburg but across Pennsylvania,” he continued.

Gov. Corbett cites bipartisan votes on a host of budget-related bills, including new education and energy tax credit programs.  “We had labor and industry standing with me on the stage, prior to the budget, talking about the energy tax credit.  Republicans and Democrats.  I had to take a picture.  I’m going to frame it and put it on the wall.”

Corbett adds that he’s been working closely with Democratic Congressman Bob Brady on regulatory issues that are proving to be vital to efforts to save jobs at several idled oil refineries in southeastern Pennsylvania.

“I bring this up because, right now, Washington can’t do it.  Maybe the states need to lead the way as to how you get this done,” Corbett said of the bipartisan tone that he wants to carry over into the fall session.

 

Here’s the picture of Gov. Corbett standing with labor & industry, Republicans & Democrats. Not only does he want to frame it, but Corbett quips that it should wind up in history books.

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General Assistance Cash Grants to End Next Month

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This will be the last month of state-issued checks for more than 60,000 needy and disabled residents who’ve been beneficiaries of General Assistance cash grants from the Department of Public Welfare.

The roughly $150-million dollar program has been on the chopping block since Governor Tom Corbett’s initial budget plan was unveiled in February.  Late in the budget process a deal was reached to allow for one additional month of checks to be issued, so as to ease the transition, but the program will soon be eliminated.

“Some of them will end up on the streets, some of them will end up in emergency rooms, some of them will end up in jail,” says Housing Alliance of Pennsylvania Executive Director Liz Hersh, who fears many of these vulnerable citizens will be left with nothing.

Vincent Hughes

State Sen. Vincent Hughes

Senate Minority Appropriations Chair Vincent Hughes (D-Phila.) has a district office right around the corner from a welfare office.  “Everyone’s in a panic,” he says of the knowledge that their lifeline is being cut.

But Governor Tom Corbett says his administration is working to connect people losing these state-funded cash benefits to other programs.  “From discussions with staff, we believe that some people probably are not exercising access to some areas that they might have access to,” Corbett explained to reporters during recent budget negotiations.

Budget Package Signed Just Before Midnight Deadline

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The new fiscal year began on Sunday with the second straight on-time, no tax increase budget.  “Today we reaffirm our commitment to job growth, to education, to the needy and to the taxpayers… our goal is growing new jobs,” Governor Corbett said upon signing the $27.7-billion dollar spending plan late Saturday night.

But critics say the new budget does little to preserve the social safety net.  They lament the elimination of a cash grant welfare program for more than 60,000 needy and disabled residents.  “A lot of men in my district will have no means of support.  And in my district, no means of support means take what you need,” explains Rep. John Myers (D-Philadelphia).  The administration has agreed to continue the program for one more month to ease the transition.

Governor Corbett says he’s pleased that an improving financial picture allowed them to restore funding to several areas, including the Accountability Block Grants that fund full-day kindergarten programs across the state.  Public schools are essentially being level-funded this year, while an extra $40-million dollars has been earmarked for the most fiscally distressed districts.

One of the biggest budget restorations came in the area of higher education, where state-owned and state related universities had been facing cuts of 20% and 30% respective, which would have been on top of last year’s 18% and 20% cuts.  The new level funding comes with a commitment from the university presidents that tuition hikes will be kept at a minimum for the upcoming school year.

Much of this weekend’s activity focused on the other executive and legislative priorities tied to this year’s budget.  Lawmakers signed off on a new system of teacher evaluations for public school teachers, and an expanded Educational Improvement Tax Credit (EITC) program that will give businesses tax breaks when they fund school choice scholarships for low-income students in the state’s worst-performing schools.

Another big victory for the administration was the so-called “ethane cracker tax credit,” which Governor Tom Corbett has described as a new industrial revolution in Pennsylvania.  It passed with broad, bipartisan support.

Charter school reform legislation did not get finalized before lawmakers’ summer break, however Corbett and leading Republicans vow to keep pressing the issue in the fall.  Also, there will be a pilot program to offer county human services funding in block grants vs. seven separate line items.  Up to 20-counties will be able to participate in the pilot; Corbett had originally proposed Human Services Block grants statewide.

Under the Capitol Dome

State Budget Votes Near

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The state’s current budget was enacted with zero Democratic support last year.  This year may not be much different if Wednesday’s House Appropriations Committee meeting is any indication.  After two hours of debate, the committee advanced the $27.7-billion dollar spending plan along party lines.

The spend number may be almost 2% above this current budget, but most of the increases are due to mandatory costs like pension obligations and medical assistance.  “This budget contains no tax increases,” Appropriations Chairman Bill Adolph (R-Del.) repeated twice for emphasis.

While better-than-expected revenues in the spring allowed Republican budget negotiators to spend a half-billion more than what was first proposed in February, Adolph told the committee the state is still on pace to end the fiscal year nearly $200-million dollars in the red.

“This is a sustainable budget that meets the needs of Pennsylvania residents,” Adolph concluded.

The recently released spreadsheets show $100-million dollars restored to the Accountability Block Grants that fund full-day kindergarten programs across the state.  Add that to $50-million being set aside for distressed school districts and budget supporters say all school districts will receive at least the same amount of state funding they got this year.

State Rep. Joe Markosek

State Rep. Joe Markosek

That doesn’t satisfy House Democrats though.  “I would challenge anybody in this room to go to any school director in the Commonwealth, in the public school system, and ask them if they think they are getting more money for educational purposes,” says Democratic House Appropriations Chair Joe Markosek (D-Allegheny/Westmoreland).

Markosek also lamented a planned tax credit for “big business” at a time when county human services are facing 10% cuts.  That 10% cut, however, is half of what was proposed back in February.

Final House votes could come as early as Thursday, with Senate votes to follow.  The state’s new fiscal year starts on Sunday.  Details of other budget season priorities – like education reforms and the ethane tax credit – are still being finalized.