State Budget Faces Two Hurdles

July 2, 2010

Since you may have seen or heard stories in your local media about a delay in the state budget, I wanted to bring you up-to-date on two budget-related issues.

As you know, the General Assembly passed the state budget on Wednesday, June 30, and you already know about the budget’s impact on library funding. The budget bill—the blueprint for spending state revenues—sits on Governor Rendell’s desk where it awaits his signature which is needed by July 10. In the meantime, the legislature is busy passing necessary companion bills—called fiscal code bills—that detail where the money comes from to pay for items in the budget.

One of these fiscal code bills has been delayed by a dispute over the creation of a bipartisan legislative budget office. Without the companion fiscal code bills, the state budget technically would be out of balance and the Governor could not and would not sign it. While the dispute over the legislative budget office is serious, it appears that negotiations today toward a resolution have led to progress, and optimism exists that this obstacle can be overcome in advance of the July 10 budget-signing deadline.

Another issue that may impact this new budget relates to federal funding coming from Washington. A number of states—including Pennsylvania—are seeking support for extending special funding for Medicaid (FMAP) reimbursements to states to offset increased health care costs for low-income and disabled Pennsylvanians. The bill has been stalled in the United States Congress.

The state budget passed on June 30th anticipates that Pennsylvania will receive $850 million in FMAP funding from the federal government. Delays in the Congress have raised fears that Pennsylvania’s FMAP funding might be less than $850 or, worse yet, zero.

If this FMAP funding is reduced or eliminated, it will create a revenue hole in the just-passed state budget. Should that happen, Governor Rendell will need to review the entire state budget to determine where he can find money in the budget that has been appropriated but not yet spent. As Governor, he has the authority to place money in “reserve” and not spend it.

It is too soon to know if this delay in federal funding might have a ripple effect that will affect other state programs including libraries. For now, I just wanted you to know about the potential problem. We will be closely monitoring this in Harrisburg and Washington through our lobbying firm, and will keep you informed as developments occur.

Thank you for your hard work and steadfast support in these difficult times. I look forward to happier news and more hopeful developments for all library services in the future.
 

Glenn R. Miller
Executive Director
Pennsylvania Library Association