Governor uses broad definition to claim $2B in cuts, savings

Democratic Gov. Tom Wolf promised $2 billion in cuts and savings in his new proposal to fix Pennsylvania state government’s deficit-riddled finances, but his definition of cuts and savings is turning out to be a broad one.

Wolf’s big promise of austerity was tailored to a Republican-controlled Legislature that has rejected billions of dollars in tax increases Wolf sought the past two years to wipe out Pennsylvania’s stubborn post-recession and fix disparities in public schools.

The Wolf administration hasn’t given precise details about every item in its $2 billion tally, but more than half of it arguably is not a cut or savings, strictly speaking.

Many items will need legislative approval, and some will be politically touchy.

For instance, it counts perhaps hundreds of millions of dollars in cost avoidances that might have materialized anyway, such as revisions in cost projections for medical care under the Medicaid program.

It also includes sources of money as varied as, say, a transfer from an off-budget workers’ compensation fund. One cash source may not be politically polarizing: netting nearly $110 million more by drawing down federal Medicaid money to match a higher assessment on insurers that administer the program.

Then there are items that Republican lawmakers may not like.

The administration predicts that it could get a $200 million lump sum by effectively using the huge Pennsylvania Farm Show Complex in Harrisburg to secure a 29-year loan. It says it could reap $95 million in higher income tax receipts if the Legislature raises the minimum wage to $12 an hour, up from $7.25 an hour.

It also projects $63 million by assessing municipalities a $25 per-person fee for receiving free full-time state police coverage that is, quite possibly, unconstitutionally subsidized by state highway improvement funds.

Wolf’s press secretary, J.J. Abbott, said the cuts and savings category includes items that help address the deficit and ease the burden on general tax collections.

“The goal was to responsibly address the deficit,” Abbott said.

The $2 billion basket does not, Abbott said, include some budget-balancing measures of which Wolf has been particularly critical, but that have been approved in recent years by Republican lawmakers.

That has included cutting benefits to the poor or vulnerable, cutting aid to public schools or postponing large payments owed to counties, insurers and school districts.

Overall, Wolf is seeking 3.2 percent more money than approved in this year’s spending plan, including cash to fill a current shortfall. It also counts on $1 billion in tax increases on Marcellus Shale natural gas production, commercial storage, custom software and insurers, and $250 million from an expansion of gambling that the Legislature has yet to approve.

The governor’s $32.3 billion plan is spare in some places.

Nursing homes and homecare workers say they are being asked to go without an increase in their Medicaid reimbursement rate for the third straight year. Some county social services would see no increase after years of scrimping. Higher education institutions would see little to no increase, leaving them collectively below what they received a decade ago. And Wolf is ordering the consolidation of state agencies, the closure of a state prison and a reduction in the number of state employees.

Meanwhile, Wolf’s budget plan, for the first time in three years, did not ask for a broader increase in income or sales taxes.

Even so, it would produce extra money for public schools — albeit less than Wolf has sought in previous years — and several programs that would get substantial infusions: prekindergarten education, county child welfare agencies and child care subsidies for low-income working parents.

Republicans who do not like where Wolf finds money would potentially have to reduce his spending proposals, as well as this: $195 million, or 13 percent more, to improve homecare and employment services for 55,000 adults who have an intellectual disability or autism.

The money would bump pay for the first time in at least five years for people who work with the intellectually disabled, whittle down an emergency waiting list and bridge a gap in services for students graduating high school.

It is, said Maureen Cronin of the Harrisburg-based Arc of Pennsylvania, the “most forward-thinking budget that we’ve seen in at least 10 years.”