DPW Budget Update: Pennsylvania Enacts a FY10-11 Budget

July 7, 2010

When the Governor released his proposed budget in February, DPW outlined its focus for the year:

sustainability—preserving services for those who need them,
quality and results—ensuring services improve the lives of those who receive them, and
accountability— ensuring efficient use of tax dollars.

The Budget passed by the General Assembly reflects the continuing impact of the challenging economy, but it enables DPW to continue that focus.

Pennsylvania is just coming out of the worst recession since the 1930s. Within this context - especially as compared to many other states around the country - we have successfully worked to avoid making deep cuts to the essential services that DPW provides to well over two million Pennsylvanians in collaboration with tens of thousands of providers and partners.

A Frugal Budget:

All areas of DPW will see some reduction in this austere budget, but the reductions are modest viewed in perspective of the revenue gap the state faces, and DPW will stay focused on a commitment to quality, results and accountability.

Challenges Ahead on Enhanced FMAP:

Of critical importance is one factor that remains unsettled: the Budget assumes receipt of $850 million in federal dollars through the extension of “enhanced FMAP”—an increased federal matching rate on Medical Assistance spending. The “FMAP extension” is currently under consideration in Congress. Should those federal dollars not be available, massive cuts would be required to fill that hole.

Financial Summary by Program Area:

Providing quality, cost-efficient healthcare for millions of Pennsylvanians
In the Office of Medical Assistance Programs eligibility for Medical Assistance has been maintained. The Budget maintains the two-part value based purchasing approach with actuarially sound rates and Pay for Performance within the managed care system. The Budget also includes a major reform of the hospital payment system, accompanied by a hospital assessment that will generate the resources to cover this initiative as well as first year savings to the Commonwealth of $121 million. Additionally, the Health Care Clinics funding continues into FY10-11.

Supporting individuals with mental health and substance abuse needs
In the Office of Mental Health and Substance Abuse Services the Budget maintains actuarially sound rates for providers in the Medical Assistance Program. The MH Base Services are reduced by less than one percent. The Behavioral Health Services Initiative has been reduced by 3.8%.

Supporting individuals with intellectual disabilities and autism
In the Office of Developmental Programs the Budget provides for the planned 150 individuals to come into the waiver program, 100 graduates from Special Education and 50 individuals. MR Base Services are reduced by less than one percent. Autism Intervention and Services are reduced to reflect actual program experience; the number of budgeted slots has been maintained.

Working to create a safe, permanent family for all Pennsylvania children
In the Office of Children, Youth and Families core child welfare services in the Needs Based Budget are fully funded as outlined in the Governor’s original budget proposal. A reduction in the Special Grants funding brings the appropriation down to reflect actual program experience. Community Based Family Centers are reduced by 4.75%.

Improving the early learning of Pennsylvania children
In the Office of Child Development and Early Learning, Pre-K Counts, the Head Start Supplemental Programs and a portion of Child Care Works are reduced by less than one percent. Nurse Family Partnership is sustained as is Keystone STARS. The Early Intervention Preschool and Infant Toddler programs are reduced by 2% to reflect actual program experience.

Supporting Pennsylvania families as they move toward self-sufficiency
In the Office of Income Maintenance eligibility for critical programs including cash assistance and Medical Assistance has been maintained. The grant amounts for those in the SSI Supplemental Grants program, as contained in the Governor’s Budget, remains.

County-Based and Other State-Funded Programs

In the absence of new revenue, in order to balance the budget, county-based and other state-funded programs will see cuts. These cuts are real, and are harmful to those who need these services. In most cases they are limited to less than one percent. In the FY10-11 enacted budget the following appropriations have been reduced by less than one percent: Breast Cancer Screening, Domestic Violence, Expanded Medical Services for Women, Homeless Assistance, Legal Services, Rape Crisis. The Human Services Development Fund is reduced by 7.4%.

Administration

State funding of DPW’s administrative lines has been reduced by 4%. We are currently analyzing the impacts of these reductions.

Additional questions about the budget can be directed to:
DPWContentWebmaster@state.pa.us.