Senate Appropriations Committee Report
(all tables and graphics can be viewed online)
New Fiscal Year Starts Strong
The Department of Revenue has not yet released its monthly distribution of the Official General Fund Revenue Estimate. Therefore, July 2018 revenue collections can be compared only to last year’s revenues.
Total General Fund revenue for July 2018 was $2.24 billion. Revenue collections were $152.9 million more than July 2017, which is a 7.3% increase over last year. Most important, the strong year-over-year increase resulted mainly from increased tax revenue collections, which grew by 7% over July 2017.
Fiscal Year 2018-19 vs. Fiscal Year 2017-18:
Motor License Fund:
Senator Mensch’s Performance-Based Budgeting Kicks Off
Work has begun on transforming the Commonwealth’s incremental budgeting system as a result of legislation championed by Senator Bob Mensch. Under Mensch’s Senate Bill 181, now Act 48 of 2017, the Independent Fiscal Office (IFO) will work with state agencies to conduct systematic analysis of programs that are based on performance measurement and established benchmarks with the potential to reallocate funding from programs that do not work to those that generate positive outcomes. The IFO will use information gained from these reviews to develop performance-based budget plans for each agency.
Act 48 requires that each Commonwealth agency be subject to a performance review every five years. This review process has just begun for the Department of Criminal Justice, the Pennsylvania Commission on Crime and Delinquency, the Juvenile Court Judges’ Commission, the Department of Banking and Securities and the Department of General Services. In addition, the IFO will also conduct reviews of the Film Tax Credit, the New Jobs Tax Credit and the Historic Preservation Incentive Tax Credit.
The IFO will spend the next few months assessing agency program performance and will present its performance-based budget plans to an independent board comprised of the Secretary of the Budget and the Majority and Minority Chairs of the Appropriations Committees in the Senate and the House of Representatives. The plans are expected to be presented in January 2019 and will focus on program performance in recent fiscal years.
Pennsylvania Deposits Money Into Rainy Day Fund
In addition to this year’s budget being completed before the June 30 deadline, the budget also transferred $22.4 million into Pennsylvania’s Rainy Day Fund, bringing the balance in that fund to nearly $23 million. This was the first time since 2007-08 that the Commonwealth has put money into the Rainy Day Fund.
Rating agencies typically recommend state governments hold between 5% and 15% of their annual spending in Rainy Day Funds to guard against economic downturns that could result in cuts to important state programs. For Pennsylvania, this range would translate to a reserve balance of $1.6 billion to $4.9 billion. According to the National Association of State Budget Officers, the median value of state Rainy Day Fund reserves was 5.8% this year.
While Pennsylvania’s Rainy Day Fund reserves are below the national median, this year’s deposit made an important policy move to increase the amount of the transfer to the Rainy Day Fund from 25% to 50% of the preliminary, year-end balance. Future deposits into the Rainy Day Fund will ensure that Pennsylvania makes progress in re-establishing healthy reserve levels.
FY 2018-19 Budget Combats Lyme Disease
Quest Diagnostics, which is a leading provider of diagnostic testing, information and services to doctors and patients, released a new study that shows the prevalence of Lyme Disease increasing in the United States. Lyme Disease has now been diagnosed in all 50 states, and Pennsylvania led the nation with 10,001 cases in 2017 – nearly as many as found in all New England states combined. The FY 2018-19 Budget includes new funding of $2.5 million for the Pennsylvania Department of Health to combat the disease. To learn more about Lyme Disease, including its symptoms and treatment, please visit the Department of Health’s Lyme Disease information web page. https://www.health.pa.gov/topics/disease/Pages/Lyme-Disease.aspx
School Safety and Security Legislation Enacted
In June, legislation sponsored by Senator Martin and me (Senate Bill 1142) to improve school safety and security in the Commonwealth’s public schools was approved by the General Assembly and signed by the Governor. The legislation includes the following provisions:
School Safety and Security Committee
School Safety and Security Grant Program
PA State Police RVAT Program
Office of Safe Schools
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