FOR IMMEDIATE RELEASE: CONTACT:
June 20, 2007 Susan Hooper
717-787-2542
Barry Ciccocioppo
717-783-1116
Budget Secretary Says Spending Caps Would Cause Irreparable Harm to Hundreds of Thousands of Vulnerable Pennsylvanians
The analysis conducted by the Governor’s Budget Office found that state General Fund spending increased by an average of 6 percent a year since 2002-03 and that nearly all of that growth can be attributed to the need to provide essential services to Pennsylvania’s most vulnerable citizens — the low-income elderly, people with disabilities, people with mental retardation, children with developmental delays, abused and neglected children, poor children in need of health care, and other vulnerable state residents.
“Spending has risen in these areas because of circumstances beyond the commonwealth’s control,” Masch said. “The number of Pennsylvanians in need has grown; health care costs have soared far beyond the general rate of inflation; and, in response to federal funding cuts, Pennsylvania stepped in with state funding to preserve essential services.
“Some observers of the state budget have suggested that annual spending
growth should be limited to a fixed measure such as the inflation rate,” he
added. “The false assumption behind these suggestions is that recent state
spending is excessive. There is no evidence to support this claim. In fact, a
recent independent analysis of all 50 state budgets found that spending in
Masch noted that seven social services or education items in the state budget accounted for 70 percent of all state spending growth in the period from 2002-03 to 2007-08. These items are Medical Assistance (Long-Term Living), Child Care, the Children’s Health Insurance Program, Early Intervention (Education and Public Welfare), County Child Welfare, Medical Assistance (all but Long-Term Living) and PreK-12 Education.
Many state programs grew quite slowly from 2002-03 to 2007-08, Masch added.
“More than a quarter of the proposed 2007-08 commonwealth budget consists of programs that grew by an average annual rate of just 2 percent since 2002-03 — well below the inflation rate,” Masch said.
The budget secretary concluded that if arbitrary caps on state spending had been imposed in the years since 2002-03, essential services would have been denied to nearly 238,000 senior citizens, people with disabilities, abused and neglected children, children with developmental disabilities, people with mental retardation, and other citizens who depend on the state to help protect their lives and welfare.
The harmful effect that state spending caps would have on
|
Effect on Vulnerable Pennsylvanians if State Spending Had Been Held to the Inflation Rate Since 2002-03
|
|||
|
Program Name |
People Served |
Spending Cut in 2007-08 If Caps Were in Place Since 2002-03 |
Number of People Not Served in 2007-08 if Caps Were in Place Since 2002-03 |
|
Medical Assistance Long-Term Living |
Elderly and disabled people in nursing homes; people 60 or over receiving home or community services |
$514 million less in state funds plus a reduction in matching federal funds, for a total loss of $1.1 billion in state and federal funds |
22,503 people in nursing homes; 24,320 seniors in home and community-based care |
|
Child Care/ Early Childhood Development |
Children in low-income working families; families now or recently on public assistance |
$200 million less |
37,000 children |
|
Children’s Health Insurance Program (CHIP) |
Children in low-income families |
$26 million less in state funds plus a reduction in matching federal funds, for a total loss of $82 million in state and federal funds |
More than 44,000 children |
|
Early Intervention |
Infants, toddlers and children to age five with disabilities and developmental delays |
$95 million less |
Nearly 25,000 children |
|
|
Abused, neglected and delinquent children |
$280 million less |
85,000 children (if counties did not replace lost funding) |
|
TOTAL |
|
$1.8 billion less (state and federal funds) |
237,823 fewer people served |
The only area of significant growth in the state budget
other than education and social services is investment in the state’s economic
development and environmental programs — the Governor’s $2.8 billion economic
stimulus program and the $625 million Growing Greener II initiative, both of
which were approved by wide margins in the General Assembly, Masch noted. These
two bond-funded programs have provided a dramatic boost to
“Governor Rendell has worked diligently to limit state spending in areas where it could be controlled without harming those who legitimately need the assistance of their fellow citizens,” the budget secretary said. “For example, spending on the administration of government in the proposed 2007-08 budget is actually 2 percent below 2002-03 levels — a remarkable achievement. But the Governor firmly believes the commonwealth has a duty to aid those in need. We as a society cannot turn our backs on them.
“There are compelling reasons why the General Assembly and the Governor
approved the prior spending levels described in this analysis,” Masch said. “
###
EDITOR’S NOTE: The analysis of commonwealth spending growth is contained in the June issue of Budget Sense, a publication of the Governor’s Budget Office. The newsletter is available online through this link: June 2007 Budget Sense.