State de­lays $1.7B in pay­ments to Med­i­caid, schools

The Hazleton Standard-Speaker - - FRONT PAGE - BY MARC LEVY

HARRISBURG — Penn­syl­va­nia state gov­ern­ment will de­lay more than $1.7 bil­lion in pay­ments due largely to Med­i­caid in­sur­ers and school districts, Demo­cratic Gov. Tom Wolf said Fri­day, amid an un­prece­dented cash crunch and a fight in the Repub­li­can-con­trolled Leg­is­la­ture over how to plug a pro­jected $2.2 bil­lion budg et hole.

Wolf ’s of fice is­sued the brief state­ment ac­knowl­edg­ing the de­lays on the day the state’s main bank ac­count was pro­jected to dip be­low zero. Wolf did not make a public ap­pear­ance to dis­cuss the pay­ment de­lays, but his of­fice said he would speak with top law­mak­ers by tele­phone over the week­end to dis­cuss the bud­get stale­mate.

The pay­ments are re­im­burse­ments for med­i­cal care, ad­dic­tion treat­ment and men­tal health coun­sel­ing un­der Med­i­caid and for the state’s share of pen­sion obli­ga­tion pay­ments to Penn­syl­va­nia’s school em­ploy­ees pen­sion fund. The Med­i­caid re­im­burse­ments, due Fri­day, will be de­layed for at least a week, Wolf ’s of­fice said.

School districts ex­pected the pen­sion obli­ga­tion re­im­burse­ments to be de­layed by a matter of a few days, although state of­fi­cials ex­pect rolling de­lays of pay­ments, at least un­til spring, for as long as the bud­get stale­mate goes on.

“We’ve been told it’s go­ing out next week,” said Jay Himes, ex­ec­u­tive di­rec­tor of the Penn­syl­va­nia As­so­ci­a­tion of School Busi­ness Of­fi­cials. “Af­ter that, we’ve been told ,‘Don’ t hold your breath.”’

John Cal­la­han, of the Penn­syl­va­nia School Boards As­so­ci­a­tion, said the or­ga­ni­za­tion was re­lieved that Wolf ’s ad­min­is­tra­tion would be able to make the pen­sion pay­ment to districts, but it wor­ried about the fate of a big ger pay­ment, in ex­cess of $1 bil­lion for public school op­er­a­tions, that is due from the state in Oc­to­ber.

In­sur­ers that ad­min­is­ter ben­e­fits for 2.2 mil­lion Med­i­caid en­rollees say the de­layed pay­ment will force them to bor­row money to make timely pay­ments to hos­pi­tals, physi­cians and phar­ma­cies that are re­quired by fed­eral law. The cost to bor­row con­trac­tu­ally can be charged to the state, Wolf ’s ad­min­is­tra­tion said.

It is the first known time that Penn­syl­va­nia state gov­ern­ment has missed a pay­ment as a re­sult of not hav­ing enough cash. Wolf has spend­ing author­ity un­der a nearly $32 bil­lion bud­get bill law­mak­ers over­whelm­ingly passed June 30, amount­ing to a 3 per­cent in­crease.

Since the Re­ces­sion, Penn­syl­va­nia state gov­ern­ment has re­li­ably bailed out its deficit-rid­den fi­nances by bor­row­ing money from the state trea­sury or a bank dur­ing the fall, a pe­riod when tax col­lec­tions are rel­a­tively slow.

How­ever, Penn­syl­va­nia’s two in­de­pen­dently elected fis­cal of­fi­cers, Trea­surer Joe Torsella and Au­di­tor Gen­eral Eu­gene DePasquale, both Democrats, are re­fus­ing to au­tho­rize a short-term loan dur­ing the stale­mate.

Should the Leg­is­la­ture never agree on a plan to sup­port spend­ing lev­els al­ready ap­proved, Wolf might need to freeze program spend­ing across state gov­ern­ment, in­clud­ing to schools, hos­pi­tals, coun­ties and other en­ti­ties, law­mak­ers say.

Still hung up in the Leg­is­la­ture are mea­sures car­ry­ing about $600 mil­lion in aid to Penn State, the Univer­sity of Pitts­burgh, Tem­ple and Lin­coln univer­si­ties and the Univer­sity of Penn­syl­va­nia’s ve­teri­nary school.

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