Recently, I submitted an op-ed to the Morning Call, providing context to the decision making surrounding the recently passed 2021-22 state budget. My article is below in its entirety.
State Budget Provides Vital Funding, While Promoting Fiscal Strength Following Pandemic
State Senator Pat Browne – 16th District
Finalizing the 2021-22 state budget, I was reminded of that old saying: “Those who fail to learn from history are doomed to repeat it.”
Those words are appropriate for decisions we were making and how we got there. We face the same financial challenges that the Commonwealth faced during the Great Recession. It was important to reflect on challenges we experienced a decade ago and the strains that were placed on state finances for years after the Great Recession.
During the pandemic, the Commonwealth faced comparable declines in revenues to what we experienced during the Great Recession, which also created large budget gaps as costs grew. Similarly, federal officials provided assistance as they have during this pandemic to offset revenue losses.
Reflecting on our experiences, it is imperative to preserve available resources so as not to place Pennsylvania’s financial security in jeopardy when federal support ends. We experienced significant challenges when the American Recovery and Reinvestment Act ended in 2011, with revenue not recovering for five years and deficits recurring for nearly a decade.
While we may have had $10 billion in the treasury during the second quarter 2021, that is not a budget surplus. That is our cash balance. To balance the 2021-22 state budget and to support vital programs for our citizens, we utilized $3.8 billion of federal funding to cover revenue lost due to COVID-19.
The impacts of the pandemic on state finances require us to focus several years ahead. Had we not planned to manage long-term imbalances and instead used remaining federal funding this year, we would experience the challenges of the Great Recession when deficits exceeded $4 billion or 15 percent of our revenue capacity. In current dollars, that deficit would exceed $7 billion and would force drastic cuts in services or significant tax increases to achieve a constitutionally mandated fiscal balance. The $2.5 billion in reserves realized last year are necessary to sustain vital services based on current revenue estimates when federal funding is no longer available.
Nevertheless, this responsible budget does provide essential funding increases to help students as well as long-term care for our older population and citizens with disabilities.
Record investments are being made in our future. Basic Education funding increased by $300 million with $200 million appropriated through the base formula developed by the “fair funding” commission I chair, and $100 million through a new formula supplement utilizing the student needs and district wealth factors contained in the base formula to target resources to schools in low-income areas. With the supplement and the base formula providing an additional $16 million this year, the Allentown School District continues to lead the state’s 500 districts in new funding over the last 24 years at a 406 percent increase as compared to the state median of 90 percent over that time.
Consistent with recommendations of the Early Childhood Education Caucus, which I chair, the budget adds $25 million for the Pre-K Counts program and $5 million for Head Start. Special Education services received $50 million in new funding through a formula developed by the Special Education Commission, which I led. Advancing the work of the Higher Education Funding Commission, which I currently chair, the budget includes a $50 million first installment of $200 million towards the modernization of the State System of Higher Education. The final plan also includes $40 million for the Educational Improvement Tax Credit (EITC) program.
In human services, the budget increases funding for individuals with intellectual disabilities by $14 million, moving more than 800 Pennsylvanians off the emergency waiting list.
To promote efficiencies, the budget accommodates the largest consolidation of operations in state history. Under a measure I sponsored, the Department of Criminal Justice, created by merging Corrections, Probation and Parole and the Pardons Board, will allow our Commonwealth to realize tens of millions in future operational savings.
While this budget took the responsible approach by using the majority of the American Rescue Plan funding to replace revenue losses and balance the budget over the next two fiscal years, it does provide $1 billion from federal stimulus funds to address targeted needs in the Commonwealth. This includes support for nursing homes, assisted living and personal care homes, road and bridge construction projects and community pandemic response.
With history as our guide to informed fiscal stewardship, now is the time to reflect on what our past has taught us and endeavor to proceed on a more sustainable course. We can better respond to tomorrow’s challenges when we reflect on what yesterday’s challenges have taught us. I believe the budget we passed this year takes into consideration the lessons we learned during the Great Recession by ensuring the decisions we make today put our great Commonwealth on more solid fiscal ground for the years ahead, paving a fiscally sustainable path for the benefit of all Pennsylvanians.
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