BLOG: Looking for Savings? Find Hundreds of Millions Here →

By J.J. Abbott, Deputy Press Secretary

February 26, 2016

Members of the General Assembly have taken to the newspapers, Twitter, Facebook, podiums and many other avenues to talk about how they want to close a $2 billion budget gap with savings – but they’re not offering any specifics.

If they only looked to the policies proposed by Gov. Wolf last year that they failed to pass, they’d realize hundreds of millions in savings this year.

In addition to saving $150 million through his GO-TIME initiative in the first year and more than $100 million in waste, fraud and abuse identified by the Office of Inspector General, Governor Wolf has proposed the following cost-cutting measures waiting for the Legislature’s action:

Cutting Size of Government

The first is the merger of the Board of Probation and Parole and the Department of Corrections. Right away, just by realizing the efficiencies of combining the two budgets, this saves at least $10 million and even more over the years that follow.


The merger of Probation and Parole and Corrections will create the new Department of Corrections and Rehabilitation to ensure public safety and the successful transition of offenders back into the community.

The 2016-17 Budget also proposes to move the eHealth Partnership Authority to the Department of Human Services to realize administrative savings and maximize federal dollars. Moving current personnel to the department would save approximately $1 million annually, in addition to improving operations and timeliness.

Reducing Wall Street Fees

One other area where the Governor has called for action but the Legislature hasn’t shown the same sense of urgency: reducing the millions and millions of taxpayer dollars paid to Wall Street.

Every year Pennsylvania spends nearly $700 million on fees to hedge funds and other Wall Street firms to manage our pension funds, more than most other states.

Last year, Governor Wolf offered this common sense proposal that could save taxpayers $200 million per year.

Governor Wolf addresses the people of Pennsylvania

While the administration is exploring what actions the pension boards could take to reduce the fees paid to investment managers, the governor believes it is important for the legislature to stand with him and codify limits to the fees we pay Wall Street from our retirement systems. By taking this action, we can ensure that this new policy will remain unchanged into the future, unless appropriately debated and discussed in the legislature and among the public.

By taking this action, we can ensure that this new policy will not be changed in the future at a whim without an appropriate debate and discussion in the legislature and among the public.

Cyber Charter School Fairness

Governor Wolf has proposed implementing the recommendations of the bipartisan Special Education Funding Commission by adjusting charter school reimbursements to better reflect actual costs of educating students with special needs.

This change will be phased in over the next three years, and result in more than $180 million in savings to school districts. The recommended funding formula, which is already used to distribute Special Education Funding increases to school districts, incorporates three levels of reimbursement tied to per-student cost of services.

Cyber charter schools are fundamentally different from traditional brick-and-mortar charter schools, and cyber charter tuition rates should reflect those structural realities. Pennsylvania’s cyber charter schools, unlike brick-and-mortar charter schools or traditional public schools, do not have many of the same facility costs and face-to-face service delivery costs.

Governor Wolf’s 2016-17 Budget implements a new funding formula for cyber charter schools to better align tuition payments with actual costs. These funding reforms will save $50 million annually for school districts across the commonwealth.

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