DPW Budget Update - July 8, 2010 | Pennsylvania Legal Aid Network

DPW Budget Update - July 8, 2010

July 9, 2010

Budget Cuts to Date are Modest

This week the Governor signed the FY10-11 Budget into law. Every part of DPW will see some reduction, but for the most part these reductions are modest—in many cases, less than one percent—viewed in the context of the economy as a whole and the dramatic cuts many other states have been forced to enact.

Extension of Federal Funds Needed to Balance the Budget

The Budget will only balance, however, if Congress extends an enhanced federal matching rate on Medical Assistance spending. The enhanced federal matching rate, or enhanced FMAP, was part of the federal stimulus act and has allowed Pennsylvania to weather the recession without large cuts to benefits for struggling families and to the public and private employees serving them.

Medical Assistance Spending Stimulates Local Economies and Supports Jobs

Medical Assistance spending has a very efficient stimulus effect, because it represents an infusion of additional dollars into the state and the “ripple effect” of Medicaid spending is largely local, remaining in state—in the form of wages and local spending.

The PA Economy is Improving, but Still Fragile

Pennsylvania is just coming out of the recession, we have added 76,200 jobs in the past three months – more than any other state besides Texas. Without extension of the federal matching dollars, PA could face layoffs of as many as 20,000 state and local employees and cuts to providers that would cost additional private sector jobs.

States Across the Country Need Aid

The state budgets of 29 other states are also dependent on this extension of federal aid—without it, the job losses in state and local government across the country could top 200,000.

Congress Has Supported Aid This Year, Support Needed Again

Both the U.S. House of Representatives and the U.S. Senate have voted to extend this assistance to states since January, but in separate bills. Now it appears that these funds are in jeopardy as some lawmakers cite concern over the deficit.

PA’s US Congressional Delegation

Pennsylvania’s U.S. Senators are both in support of this critical aid to states. Some, but not all, of the U.S. Representatives support an extension of this funding.

To Learn More

If you want to learn more about the impact of this assistance in your community, you can visit the web site of the Pennsylvania Budget and Policy Center by clicking here for detailed information by each Congressional District about the numbers of county residents whose jobs or services would be at risk without these funds.

The mission of the Department of Public Welfare (DPW) is to protect and serve Pennsylvania’s most vulnerable citizens, to promote, improve and sustain the quality of family life, and to break the cycle of dependency, while managing our resources effectively and promoting respect for employees.