Governor Rendell’s Proposed 2010-2011 Commonwealth Budget

February 9, 2010

Earlier today Governor Rendell presented his proposed 2010-2011 Commonwealth Budget before a joint session of the Pennsylvania General Assembly.  The proposal is the Governor’s final budget presentation.  It is reflective of the Commonwealth’s current economic climate, declining tax revenues, growing unemployment and increasing demands for services.

Governor Rendell proposes a $29 billion general fund budget - a 4% increase over FY 2009-2010.  The budget proposal does not include an increase in the personal income tax; however, it reduces and broadens the sales tax and once again proposes new taxes on the extraction of natural gas, as well as the sale of cigars and smokeless tobacco.  The proposal also assumes a second year of Federal Fiscal Relief ($5 billion over three fiscal years).

The following Basic Education line items are among those included in the 2010-2011 Commonwealth Budget proposal:

Budget Line Items	2009-2010 Actual	2010-2011 Proposed
Basic Education	$          4,871,339,000	* $                   5,226,142,000
Stablization (ARRA	654,747,000	654,747,000
Accountability Grants	271,425,000	271,425,000
Special Education	1,026,815,000	1,026,815,000
Early Intervention	173,585,000	186,142,000
Intermediate Units	5,554,000	5,498,000
Pupil Transportation	526,093,000	542,355,000
Nonpublic/Charter School Transportation	78,876,000	78,205,000
Nonpublic School Services	89,082,000	91,933,000
Nonpublic Texts, Materials,Equipment	27,243,000	28,115,000
Career/Technical Education	62,000,000	62,000,000
Technology Initiaive	-	-
Social Security	523,613,000	546,155,000
Retirement	334,476,000	399,724,000
Teacher Prof. Development	25,000,000	22,750,000
School Improvement Grants	11,440,000	11,326,000
Educational Asst. Prog. (Tutoring)	59,142,000	55,342,000
Reimbursements for Charter Schools	226,936,000	226,936,000
Dual Enrollment Payments	8,000,000	8,000,000
Science:  Its  Elementary	13,625,000	13,489,000
Classrooms for the Future	-	-
Pre-K Counts	86,412,000	85,937,000
Urban and Minority Teacher Dev.	-	-
Safe and Alternative Schools	-	-
Alt. Ed. Demo Grants	-	-
High School Reform	3,700,000	3,663,000

* Reflects an increase of $354.8 million in state funds for basic education.

Basic Education

Governor Rendell’s 2010-2011 proposed Commonwealth Budget includes a 6.4% increase in the basic education line item ($354.8 million).  The line item for special education reflects no increase in state funding.  The line item for Early Intervention is increased by $12.5 million in order to provide resources for continuation of the funding methodology that establishes a benchmark payment per child for program services and to expand the number of children served from age three to five.  The dollars will provide expanded services to 1,229 children.

The budget proposal recommends continuation of only one of the two science/technology initiatives begun four years ago.  Science: Its Elementary provides resources for hands on learning equipment and intensive teacher training to elementary schools.  The program funding is to be reduced by $136,000.  Funding for Classrooms for the Future which provided resources for high school classrooms to acquire student computers and enhance classroom technology is again eliminated.

The final 2009-2010 Commonwealth Budget passed last fall eliminated funding for Safe and Alternative Schools.  The current budget proposal does not recommend restoration of the line item.

While not providing specifics, the Governor also indicated his intent to institute a statewide health benefit plan for public school employees.

Revenue

Governor Rendell called for the establishment of a “Stimulus Transition Fund” to deal with the huge financial dilemma facing the Commonwealth when the federal stimulus aid expires in 2011 accompanied by a dramatic spike in the state’s pension obligations. 

The sales tax is now 6% in 65 counties, 7% in Allegheny County, and 8% in Philadelphia.  Revenue for the proposed Stimulus Transition Fund would be generated through a proposal to lower the sales tax rate two percentage points to 4 % statewide and removing as many as 74 current exemptions that prevent many items from being taxed.  The major exemptions for food, clothing and prescription drugs would remain in place.  If the sales tax rate is lowered to 4% (supplemental rates for Allegheny and Philadelphia counties would remain in place) it is estimated that the additional funds raised would be about $1.4 billion.

Additionally, Governor Rendell called for taxes on cigars and smokeless tobacco as well as the extraction of natural gas.  The funds raised through the tax changes are to be placed in a “Stimulus Transition Fund” and will not be accessible until 2011-2012.

Additional information and explanations relative to the budget proposal will be forthcoming. Subsidy printouts and other budget information can be found on the Pennsylvania Department of Education’s website.  Go to:  http://www.pde.state.pa.us/