Kicking the Can Down the Road
The Senate budget is a fake budget because not only does it underfund essential programs and services; it almost guarantees that we would need to pass a supplemental appropriation in the spring, setting us up for yet another protracted budget standoff at a point when we should instead be working on NEXT year’s budget.
By copying last year’s numbers, the Senate budget fails to account for significant projected increases in Medicaid costs. (It also fails to meet our court-ordered obligation to fund our schools, but we’ll have more on that below).
The most recent House budget proposal, which passed the House on October 8 with a bipartisan vote of 105-98, represents about a 5% increase over last year’s state budget. Most of that increase is allocated toward increased Medicaid costs and toward fulfilling our statutory and constitutional requirement to fund K-12 education.
Medicaid (called Medical Assistance in Pennsylvania) pays for healthcare for more than 3 million Pennsylvanians, including seniors in nursing homes, people with disabilities, and low-income families.
If the?state budget underfunds Medicaid, as the Senate’s proposal would do, Pennsylvania still has to keep paying providers (like hospitals, nursing homes, and pharmacies), because?Medicaid is what’s called a “must-pay line,” or mandatory program,?under both state and federal law. The state can’t just decide halfway through the year to stop paying for hospital visits, care services, or prescriptions once the money runs out.
When that happens, Pennsylvania’s governor and legislature must pass a?supplemental appropriation bill?in the middle of the fiscal year to add money to the Department of Human Services budget. Senate leadership knows this.
Why are the two sides so far apart?
The most basic truth is that we have fundamental differences in our goals, priorities, and worldview. The more difficult truth is that Senate leadership is bending to the will of unelected political entities funded by billionaires rather than acting in the interest of their constituents, our commonwealth, the principles of good governance, or even their own caucus.
Senate leadership is fighting to shift more public tax dollars to the super wealthy while cutting services and raising costs for seniors, families, and vulnerable Pennsylvanians. We cannot continue to steal opportunity from our children to continue doing the bidding of people and corporations who are hoarding money for themselves while standing in the way of a prosperous future for our commonwealth.
A Court Order and a Constitutional Mandate
If you’re concerned about property taxes, public schools, home values, our children’s future, or all of the above, please read on, because we have some more dots to connect.
The Pennsylvania Constitution states that the General Assembly must provide “a thorough and efficient system of public education” that does not discriminate against students based on their level of income or the value of taxable property in their school district.
Back in 2014, six Pennsylvania school districts, the Pennsylvania Association of Rural and Small Schools, the NAACP-PA State Conference, and a group of public school parents filed suit in Pennsylvania Commonwealth Court against state legislative leaders, state education officials, and the governor for failing to uphold that constitutional obligation.
In 2023, after a nine-year battle, the school districts and their co-plaintiffs won. The Commonwealth Court directed the General Assembly and the Executive branch to fix the state’s broken, unconstitutional funding system.
The fight for school funding has been a unifying priority in the Democratic caucus for decades, and the Democratic caucus overwhelmingly regarded the court’s decision as a victory for Pennsylvania schools, children, and communities.
Our 2024-2025 state budget laid a solid foundation and took a big first step toward fully and equitably funding our schools and addressing the unfair tax burden on school districts like Coatesville and others that have paid well over their fair share for far too long.
But the Republican caucus overwhelmingly viewed the court’s 2023 ruling as a loss (or, perhaps more accurately, their billionaire-funded political backers did), and now they are trying to run the ball back.
The Senate’s failure to negotiate in good faith on a fiscally responsible budget is their way of defying a court order to fairly and adequately fund our schools.
What does this have to do with my property taxes?
When the General Assembly fails to uphold its end of the bargain, local property tax payers have to make up the difference. In wealthy school districts, which tend to have higher home values and lower property tax rates, that might be sustainable, although it doesn’t excuse the General Assembly from their constitutional responsibility.
In lower income districts, rural school districts, and school districts with fewer business and commercial properties, the burden falls heavily on seniors and working families. And while property taxes in these school districts threaten to drive folks out of their homes, the school districts are still unable to generate enough tax revenue to make up for the state’s shortcomings, meaning the students in those schools have fewer resources and less opportunity than students in wealthier surrounding districts. That was the basis of the school funding lawsuit, and it’s a cycle that will continue to perpetuate and drive your property taxes higher until the General Assembly steps up to fulfill its constitutional mandate.
Where do we go from here?
When I was first elected, we were negotiating in a budget deficit. We had to have serious conversations around whether to cut funding for human services or schools. That is not the situation we are in today.
In this budget, we have the ability to fund our schools, counties, food banks, senior services, care providers, hospitals, and nonprofit organizations without touching the money sitting in our healthy Rainy Day fund.
A budget that cuts funding for essential services while we have more than $10 billion sitting unallocated in state coffers would not only be fiscally irresponsible; it would be immoral.
The House has offered serious proposals. When they went unanswered, we compromised and tried again. While we will never stop standing up for taxpayers or fighting to fund our schools, healthcare, and essential services, we have made cuts and concessions to address the Senate’s concerns and to accommodate policy disagreements. Our budget reflects responsible governance. At this point, the Senate’s refusal to negotiate is not about policy differences; it’s about politics.
House Democrats are taking our responsibility to the people of Pennsylvania seriously. We are simply asking the Senate to do the same.