1. Day of Reckoning: The 2011-12 Budget SEPA Coalition March 21, 2011

2. 44 States Anticipating Shortfalls Going Into FY 11-12

3. Over $3 Billion in Temporary Federal Funding Goes Away in 2011-12

4. As Recession Ends, Tax Collections Beginning to Grow Again

5. Current Year Surplus Expected

6. Still Below Pre-Recession Levels

7. OVERVIEW

8. Total Spending: 2011-12 Proposed

9. 85% of Budget is Education, Health, Public Safety

10. Spending Drops to 2008 Levels

11. Budget Themes “Day of Reckoning” is here ◦ Living within our means ◦ No taxes, fees or revenue of any kind ◦ Spending reductions with mandate relief Limited environmental oversight “friction free” Shared sacrifice Private school vouchers

12. What’s missing? SALE OF LIQUOR STORESMARCELLUS SHALE TAX

13. Budget Resumes Business Tax Cuts Business Bonus Depreciation Tax Cut ($200 - $400 M in 2011-12) Research & Development Tax Credit Up Capital Stock and Franchise Tax Phase-Out Resumes in 2012 Film and Job Creation Tax Credits Down Temporary Cut to Other Tax Credits Ends

14. A Tale of Priorities Education: -11% Higher ed: -52% DCED: -31% Corrections: +11% Parole: +6.3% State police: +5.7%

15. Education $1.1 billion cut from basic education ◦ $550 million (10%) basic ed line ◦ $259 million Accountability Block Grant ◦ $47.6 million EAP tutoring program ◦ $224 million charter school subsidy Special Education: ◦ $1.0 billion, 3 rd year Early intervention ◦ Up 9% to $198 mill

16. Early Childhood Budgetary Reserve level Pre-K Counts Head Start ABG eliminated Pre-k classrooms 17,000 children in full day kindergarten in Philadelphia

17. Education Cuts in Philadelphia Basic ed formula: $104 million ABG: $ 56 million EAP: $ 18.7 million Charter school:$112.5 million SIG:$ 5.9 million TOTAL$ 297.2 million

18. Libraries and Literacy State Library ◦ 54% reduction since 2008-09 Public Library subsidy ◦ Held harmless ◦ Down 30% overall Adult Literacy ◦ Down $2.5 million ◦ 46% cut since 2008-09

19. Higher Education ProgramAmountChange State system$232.6 million-50% Penn State$165.1 million-51% Community colleges $212.2 million-10% Pitt, Temple, Lincoln $169.5 million-52% PHEAA$411.6 million-6.7%

20. Community Economic Development $224 million total ◦ Down $104 million ◦ Down 64% from pre-recession levels Cuts Housing/Redevelopment Assistance Eliminated HEMAP Combined WAM programs Eliminates industry specific programs

21. Human Services not Spared Human Services Development Fund: $23 million eliminated BHSI: Down $1.01 million (split) County Child Welfare: 2% reduction ◦ 3% reduction Title IV-E out of home placement Homeless and rental assistance: level funded Hospitals: $330 million State and Federal cut Haircuts

22. Continued reductions in services Mental health and intellectual disabilities ◦ Mental health services state increase but expiring ARRA causes small reduction Behavioral health services: down 2% No funding for waiting lists Autism services federal funds cut

23. DPW COST SAVINGS INITIATIVESAVINGS Deinstitutionalization of services and rebalancing of long-term living $ 40.5 million More effective care management$ 55.9 million Smart purchasing$165.5 million Program integrity*$ 46.6 million Fair Share payment$ 56.1 million TOTAL$364.6 million

24. Welfare and Cash Assistance Work First Orientation ◦ New Directions: -50% ◦ County Assistance:-$15 million redirect E&T ◦ Cash Grants: -$26 million for Employment & Training Supplemental payments: ◦ Essentially flat funded

25. Shift of Tobacco Settlement Funds Public Welfare ◦ MAWD ◦ Long-term care ◦ Home/Community Services Health Department ◦ $74 million ◦ Total increase: $61.5 million $130 million from Tobacco Settlement Fund diverted to the Liberty Loan Fund

26. Assessing the Budget FEAR RELIEF REALITY

27. Timetable: May 31 vote

28. The Legislatures Response Senator Scarnati: Marcellus impact fee Governor Corbett: $27.3 billion spend Senator Corman: Higher ed. cuts too deep House Republicans: welfare budget too high No money for General fund Spending limit even if revenue up? Where does the money come from Look for cuts here

29. Alternatives

30. The Choices Marcellus Shale: $200 m Other tobacco: $42 m Bonus deprec. $235m CSFT: $90 m Delaware loophole: $600 Recapture Bush tax cut: $330 million Penn State, CC HSDF, Literacy State system Pitt and Lincoln Basic ed, LTC ABG, Temple

31. What you can do Join SEPA Coalition Get info from Better Choices www.betterchoicesforpa.com Get Active! May 3 rd Rally at the Capitol www.clearforpa.orgwww.clearforpa.org for bus information