PA Budget Proposal: Major Policy Updates & Response Highlights

PPC Board of Directors Public Policy Update March 10, 2022

2022-23 PA Budget: Gov. Wolf s Proposal Total spending plan is for $43.7 billion (13% increase from last year s budget) Proposal contains no tax increases Relies on the assumption that $5 billion of federal stimulus funds will be spent on general government operations in 22-23 Incorporates increased tax revenue for program funding increases Does not spend the $2.9 million rainy day fund Includes historic proposed increase for K-12 education $1.25 billion to the Fair Funding Formula $300 million for the Level Up Initiative $200 million for special education $6 million for CTE Includes other policy reforms including raising the minimum wage up to $15 per hour by 2028 Corporate net income tax rate would be cut from 9.99% to 7.99% See PPC's full budget analysis.

Republican Response to Wolf s Budget Proposal Majority party leadership criticized the Wolf Administration s budget projections which differ from the IFO s projections by $5 billion. Senate Republicans warned against spending all federal funds this year as the threat of the state s structural deficit looms. House Republican leadership projected Wolf s proposal would leave the next governor with a guaranteed deficit of $800 million+. Large spending increases in state funds would likely require a tax increase in future years if the IFO s budget projection is validated.

Child Welfare Update The proposed 2022-23 budget contains a 14% increase ($181 M in state funds) for child welfare. Approximately $149 M will support county child welfare agencies in their needs-based budget. DHS Budget contains an increase of $1.4 M for additional staff to support increased regulatory, licensing, budgetary, and administrative workloads. PPC will advocate for the governor s proposed budget increase for child welfare.

Home Visiting Update The proposed budget contained a $15 million increase for the Community Based Family Center line as well as $8 million in federal CB-CAP funds. An increase of $95,000 was proposed in the Nurse- Family Partnership line (to replace federal funding received in 21-22 for COVID-19 response). FY 2021-2022 budget ask is for a total of $16.2 million ($15 million for Family Centers line and $1.2 million for NFP line). Family Support Programs Funding RFA from OCDEL was released with applications due March 11, 2022.

Pre-K Update The proposed budget contains a $70 million total increase for pre-k. The Pre-K for PA campaign is supporting the governor s ask of a $70 million increase for pre-k ($60 million increase in PKC and $10 million increase in HSSAP) which would provide an additional 2,308 slots for kids to be enrolled in pre-k and a rate increase for Pre-K Counts. PPC will be releasing our per capita comparison report on pre-k in the next few weeks.

Child Care Update The two childcare funding lines (Child Care Services and Child Care Assistance) have been level-funded in the past two budget cycles, and there is no proposed state increase for FY 2022-23. The proposed budget includes $30 million in state funding for high-quality child care for state employees. Start Strong PA will be advocating for combined federal and state funds, including repurposing $30 M in funds for a state employee child care initiative in the DGS budget.

K-12 (CTE) UPDATE The 2021-22 budget contained $300 M for K-12 education: $200 M for BEF and $100 M for the Level Up initiative, $50 M for Special Education, and no increase for CTE. Governor s 2022-23 proposal calls for a $1.8 billion increase in K-12 education: $1.25 B in BEF line $200 M increase for Level Up initiative. $200 M for Special Education Funding $6 M for CTE PPC recently released its latest CTE report PPC and PACTA will support the governor s proposed $6 M increase for CTE. In order to increase the CTE line item, the Public School Code must be amended to lift the funding caps for the CTE formula.

Thriving PA Update CHIP: The proposed budget contains almost $40 M increase to replace federal pandemic funding and for the end of the PHE. The budget also accounts for the end of the PHE in Medicaid with associated costs/savings from changes in the FMAP rate but also people expecting to go off the roles Read more about the PHE unwind in PPC's recent enrollment fact sheets by congressional district and PA House/Senate district. Post-partum extension: There is funding in MA & CHIP for the 12 month post-partum extension which begins April 1, 2022. WIC is flat-funded at $278 M (these are only federal funds no state funding occurs for WIC). Early Intervention: proposed increase of $11.5 M for EI Part C, EI Part B is level-funded. Part C increase includes funding for a new eligibility category for children born to a parent with maternal depression/anxiety.

Other Items We re tracking the following legislative items of interest to PPC: HB 1866: Permanency package for young adults transitioning from the foster care system. Thriving PA legislation: WIC advisory council, lead screening bill. Final form regulation on charter reform. Federal activity: Next steps on pre-k, child care and health care provisions with Build Back Better not having momentum. Federal MIECHV reauthorization needed by September 30, 2022.

QUESTIONS? Thank you! papartnerships.org @PAPartnershipsforChildren PAP4Children