New State Budget Cuts Proposed as FMAP Funding Falls Short

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August 11, 2010

A day after Congress approved a $16 billion extension of FMAP funds and a $10 billion education jobs fund, Governor Ed Rendell announced more budget cuts are on the way.

The Commonwealth is slated to receive $600 million in enhanced FMAP funds for public health and human services, which is at least $250 million short of the 2010-11 budget that was passed by the General Assembly.

Today, Governor Ed Rendell announced a plan to bridge a projected $282 million shortfall:

  • 1.9% cuts across the board in discretionary appropriations (expected to total $198 million, including a $50 million cut in basic education funding)
  • 1.9% cut to the Legislature (totaling $6 million)
  • 1.9% cut to the courts (totaling $5 million)
  • 1.9% cut to independent elected offices (totaling $3 million)

The plan also includes $70 million in new revenue from a natural gas severance tax.

The 2010-11 budget includes language holding the General Assembly to an October 1 deadline to pass a severance tax, although there is no agreement on the structure of the tax. It would go into effect on January 1.

The $50 million cut from state basic education funds would likely be replaced with a portion of the Education Jobs fund program enacted this week. That program allows states to distribute funding using an existing basic education formula, Title 1 or through an education reform formula.  

To qualify for these funds, states must spend at least as much on both elementary and secondary education and on higher education as was spent in FY 2009-10. Education Jobs funds must be used to pay for salaries and benefits to retain, rehire or hire teaching or support staff working in early childhood, elementary or secondary education.

In Pennsylvania, state funding for basic education was only restored to 2008-09 levels in this current budget, with temporary federal recovery dollars filling in the rest.

There is more work to be done! Without a severance tax, more cuts will be on the way in Pennsylvania, and legislative leaders could be looking for even further cuts to education. We need to call on lawmakers to enact a strong severance tax in the fall.