MEMO: Republican Budget: The Math Still Doesn’t Work

March 16, 2016

SUBJECT: Republican Budget: The Math Still Doesn’t Work
TO: Interested Parties
FROM: Randy Albright, Secretary of the Budget
DATE: March 16, 2016

For the third time, Republicans in the legislature are attempting to put an unbalanced budget that underfunds education on the governor’s desk. Once again, they are doing so without compromising or having a single conversation with the administration about the contents of the budget.

Instead of working toward a solution, this is simply more partisanship. It is time for the Republicans in the legislature to stop trying to score political points and finally compromise.

The Senate amended the Corrections supplemental bill (HB 1801) with a $30.025 billion budget plan. This new plan is $238 million below the budget sent to the governor by the Republicans in December and more than $200 million below the budget sent to the governor in July.

The bottom line: the math still doesn’t work.

$290 Million Out of Balance in 2015-2016
Although the latest Republican budget attempts to cut expenditures by another $238 million, it remains at least $290 million out of balance.

$1.6 Billion Deficit in 2016-2017
Using their financial statement estimates for 2016-17, their budget creates a year end deficit of more than $1.6 billion. This $1.6 billion deficit assumes no school construction payments, most likely putting to 2016-2017 deficit closer to $2 billion.

$50 Million for Basic Education is Paid for With a $40 Million Scholarship Cut
The Republican budget attempts to increase education spending by robbing Peter to pay Paul. In order to fund a $50 million paper increase in basic education funding by forcing PHEAA to transfer $40 million from their scholarship reserves back to the General Fund.

Retroactive Appropriation Cut to PHEAA
Furthermore, the $40 million cut to PHEAA is part of funding that was already released to the agency. To achieve this cut, the Republicans are cutting PHEAA’s funding retroactively and asking them to send the commonwealth a check.

$45 Million Overall Cut to Basic Education
The latest Republican budget adds $50 million to their education spending, but because they refuse to restore $305 million in school construction reimbursements for school districts and lease payments for charter schools the result of the budget is still a $45 million cut for schools districts.

Fully Restores Legislative Appropriations, Not Prisons or Medical Assistance
The latest Republican budget fully restores appropriations for the House and Senate by more than $50 million, but underfunds mandated medical assistance payments in the Department of Human Services by $93 million and Department of Corrections costs by $17 million.

​More Gimmicks
The latest Republican budget includes another round of gimmicks. It underfunds mandated payments and fundamental government operations, punting those costs to the next fiscal year.

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