2021/22 Executive Budget At-A-Glance

By House Appropriations Committee Staff , | 3 years ago

The 2021/22 executive budget proposal spends $37.8 billion, an increase of $3.8 billion, or 11.1 percent, over the current year, after considering the request of $903 million to fully fund the current year.

Investing in Our Kids:

• Basic Education: a $1.35 billion, or 21.6 percent, increase to bring the total to $7.6 billion –
  • Runs $6.25 billion (all existing funding) through the Fair Funding Formula,
  • Provides $1.15 billion to ensure that no school district loses funds, and
  • Adds $200 million for all schools through the formula
• Special Education: $200 million increase
• Pre-K Counts: $25 million increase (enables 2,800 more slots)
• Head Start: $5 million increase (enables 471 more slots)
• Child Care: rate increase effective March 2021 – 2021/22 impact of $87 million
• Early Intervention: $11 million for 2,000 additional slots for children age 3 to 5

Advancing Fairness, Equity, and Quality in Our Public Education System:

• $45,000 minimum teacher salary
• Charter school reform: $229 million savings to school districts
  • Applying the special education fair formula to all brick-and-mortar charter schools: $99 million in savings to school districts
  • Establishing a statewide cyber charter tuition rate of $9,500 for nonspecial education students and applying the fair formula for special education to all cyber special education students: $130 million savings to school districts
• Up to an additional $36 million in increased student scholarships by lowering the maximum administrative set-aside in the Education Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) from 20 percent to 5 percent

Making College More Affordable:

• Nellie Bly Tuition Program:
  • $199 million for a needs-based scholarship program for full-time PASSHE students with a commitment to stay in PA
  • Proposal gives priority to students pursuing careers in education
  • Funded by redirecting revenue from the Race Horse Development Trust Fund

Advancing Pennsylvania’s Economic Recovery through Business, Agriculture, & Workforce Investments:

• Commitment to break down barriers to employment by supporting students and veterans through addressing key barriers identified by the public-private Keystone Economic Development Workforce Command Center
• Increasing the minimum wage to $12 per hour effective July 1, 2021 (included tipped employees), with 50 cent annual increases up to $15 per hour on July 1, 2027 ($116.4 million direct revenue increase)
• $1.5 million for Industrial Resource Centers (IRCs)
• $1.5 million competitively bid to Partnerships for Regional Economic Performance (PREP) organizations to foster coalitions with institutions of higher education
• Maintain $8 million for Workforce and Economic Development Network of PA (WEDnetPA)
• $1 million investment in Pennsylvania Agricultural Surplus System (PASS)
• $500,000 to help with military base realignment and closure actions by the federal government

Back to Work PA:

• $3 billion to help workers and businesses stabilize the economy and recover from the pandemic
  • Not in the General Fund budget
  • Refocuses Restore PA proposal, but specific funding unclear, possibly through a severance tax
  • Directs investment into training and child care, two of the five barriers identified by the Keystone Economic Development Workforce Command Center
  • Develops a reshoring initiative by prioritizing and recapitalizing existing programs
  • Proposes fostering new innovative companies
  • Strategic investments in municipalities to prevent distressed status through existing DCED programs
  • Internet access and broadband infrastructure for teleworking, telehealth, and telelearning, especially in underserved areas

Keeping Pennsylvanians Safe through Criminal Justice Reforms:

• Legalization of Adult-Use Cannabis with revenue directed toward supporting historically disadvantaged small businesses and restorative justice programs
• $168 million for a fair service fee for PA State Police services provided to every municipality
• Community policing and accreditation of police departments
• Implement a best practices model for bail and pretrial services, including monetary cash bail reform
• Probation reform that balances services and accountability
• Expand clean slate to additional offenses and reduce the waiting periods for lesser offenses
• Expand eligibility for elderly and infirmed individuals to be released from prison
• Create an Office of Indigent Defense
• Compensation for wrongfully convicted individuals of $50,000 per year of wrongful incarceration

Protecting the Most Vulnerable:

• $1 million to expand legal services to low-income individuals and families
• $1 million to develop and provide comprehensive direct care worker training in the Participant Directed Model
• $1.25 million to discharge 20 individuals from state hospitals through the Community Hospital Integration Project Program (CHIPP)
• $13.8 million to provide home and community-based services to an additional 100 individuals on the emergency waitlist in the Consolidated Waiver and 732 individuals on the emergency waitlist in the Community Living Waiver
• $1 million to reduce the number of children and youth in out-of-home placements triggered by homelessness, housing instability, or inadequate housing to promote family stability and reunification

Increasing Local Capacity to Fight COVID-19:

• $8.4 million for the existing ten county and municipal health departments and the creation of an eleventh in Delaware County
• $6 million to maintain essential supplies, including PPE

Protecting the Environment by Investing in Workers, Communities, & a Clean Future:

• Investing a portion of the Regional Greenhouse Gas Initiative (RGGI) in a new Energy Communities Trust Fund to support dislocated workers and communities impacted by power plant closures
• Investments in environmental justice communities to minimize and correct disproportionate environmental impacts
• New investment in greenhouse gas abatement, energy efficiency and clean and renewable energy programs
• Investments in contributors in the industrial and commercial sectors to reduce their greenhouse gas emissions

Repairing & Improving Our Infrastructure:

• Expansion of the Redevelopment Assistance Capital Program (RACP) to allow for broadband investment
• Expansion of RACP by $1 billion to remediate lead and asbestos, including in schools

Making the Tax System More Equitable:

• Expand the special tax forgiveness to $15,000 for single filers and $30,000 for married filers, with a $10,000 allowance for each dependent and increase the Personal Income Tax (PIT) rate to 4.49 percent effective 7/1/21 ($2.96 billion in additional revenue)
• Implement, effective 1/1/22, combined reporting of Corporate Net Income Tax (CNIT), cap net operating losses at 40 percent, and reduce the CNIT rate from 9.99 percent to 8.99 percent ($208.5 million in additional revenue)
  • Additional reductions proposed to be 8.29 percent in 2023; 7.49 percent in 2024; 6.99 percent in 2025; and 5.99 percent in 2026 and thereafter.

Financial Statement Governor's Proposed 2021/22 Budget
amounts in thousands	2019/20 Actual	2020/21 Available	2021/22 Budget	% Chg
Beginning Balance	$               30,373	$       (2,734,070)	$          (233,422)
Revenues and Lapses (net of Refunds)	$       31,325,785	$       36,415,200	$       38,461,800	5.6%
Funds Available	$       31,356,158	$       33,681,130	$       38,228,378	13.5%
Enacted Appropriations	$       35,219,623	$       36,248,063	$       40,207,348	10.9%
Supplementals, Lapses and Federal Adjustments	(1,129,395)	(2,333,511)	(2,370,161)
Total Expenditures	$       34,090,228	$       33,914,552	$       37,837,187
Rainy Day Fund Transfer	-	-	(97,798)
Ending Balance	$       (2,734,070)	$          (233,422)	$             293,393