WE HAVE A BUDGET AGREEMENT!
Last year, the Pennsylvania budget was enacted 101 days late, which had a profound impact on many workers and employers. This year was a more efficient, cooperative, bi-partisan process that resulted in an on-time budget that is cognizant of the future financial challenges facing Pennsylvania.
The Pennsylvania Legislature passed a $28.05 billion state budget on June 30, marking the first on-time budget during the Rendell Administration. The Senate was first to pass an amended version of HB 2279 early Wednesday afternoon. The Senate voted 37 to 13 (Senate Roll Call) in favor of the bill with twenty Republican votes and seventeen Democrat votes. Later Wednesday, the House concurred with the Senate passed budget bill by a 117 to 84 vote (House Roll Call). Sixteen Republicans joined 101 Democrats in support of the measure.
Some of the major aspects of the budget agreement include:
- The assumption of $850 million in additional federal Medical Assistance Program (FMAP) dollars. The U.S. Senate recently voted down a bill that included the FMAP money.
- A $250 million increase in basic education spending. Governor Rendell had sought a $354 million increase, but settled for $250 million in the final deal.
The budget does not include:
- New or increased taxes on cigarettes, cigars, or smokeless tobacco.
- Combined reporting.
- Any expansion of the sales tax.
- Elimination of the vendor allowance for sales tax collection.
- A severance tax on natural gas with funds allocated to this year's state General Fund spending. (An agreement was made to craft a separate piece of legislation by October 1 that will include a severance tax that balances recovery of capital investments with compensation to local governments for industry impacts. The agreement also calls for the legislation to provide for regulatory consistency across jurisdictions and "pooling" of land holdings before a tax would take effect January 1.) Details still have to be worked out.
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