Diversion Politics and Factual Errors with ‘Americans for a Tiny Sliver of Rich People’

By Stephen Herzenberg, Third and State

Jennifer Stefano, the Pennsylvania director of Americans for Prosperity, published an op-ed in the Harrisburg Patriot-News Friday – the latest salvo in an organized right-wing assault on nutrition assistance and other safety net spending.

The op-ed claims that the number of Americans who receive some kind of subsidized food assistance is at more than 101 million and “has surpassed the number of full-time private-sector workers in our country.” Actually, there are 114 million private-sector workers in the United States, according to Bureau of Labor Statistics data for June 2013, but who’s counting.

Americans for Prosperity is a conservative advocacy group funded in part by the Koch Brothers. It is the 1% looking out for the interests of the 1%.

As I noted, Jennifer Stefano’s op-ed is part of a larger campaign to cut safety net spending. Food stamp spending in the current slow economy has temporarily risen to about 0.5% of GDP, from about 0.33% of GDP in the early 1980s recession. Of course, that recession was much shorter and shallower nationally than the recent Great Recession.

Today food assistance remains well targeted: 85% of households participating in the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, have gross incomes below the poverty line; 98.5% have disposable (or “net”) incomes below the poverty line. SNAP provides only $1.50 per person per meal and is scheduled to drop to $1.30 per person per meal in November. (Stefano has nothing to say about the preservation of farm subsidies for agribusiness – the most generous “food program” in the United States.)

Stefano presents the temporary growth in food assistance as a “kitchen table” issue. Let’s put it in perspective. Another kitchen table issue is the dramatic decline in the share of the economic pie going to the vast 99% of Americans – because the share going to the top 1% has risen by about 10 percentage points, The temporary increase in food stamps spending is thus about 1/50 the size of the not-so-temporary increase in the share of income going to the Koch Brothers and, I’m guessing, other funders of Americans for Prosperity.

Stefano’s piece is part of a well-oiled effort to distract middle-class families from the real cause of their economic struggles. When you look at the facts, that cause is not rising taxes or spending on social programs. It’s the rise in economic inequality (and, to a lesser degree, the fall in taxes paid by the more affluent).

Here’s hoping that Pennsylvanians and Americans will keep their eyes on the ball and not fall for the obfuscations of groups like Stefano’s.

Pa. Budget: Failing to Invest in a Stronger State Economy

By Chris Lilienthal, Third and State

Despite ending the 2011-12 fiscal year with a $649 million fund balance, Pennsylvania fails to make the investments essential to building a strong economy or to reverse a recent trend where job growth in the commonwealth has lagged behind other states.

So concludes the Pennsylvania Budget and Policy Center analysis of the enacted 2012-13 state budget, which was released Friday.

In the final budget, the General Assembly restores some of the cuts proposed by Governor Tom Corbett, while leaving intact a 10% cut to human services and deep cuts to public schools and higher education made in 2011. The budget continues to shift costs to local governments and taxpayers, while adding new tax breaks for businesses.

The spending plan, at $27.656 billion, is $517 million more than the Governor’s February proposal but remains below budgeted 2008-09 levels, despite four years of recession-driven increases in demand for services. The largest cut in this budget comes from the elimination of the General Assistance Program, which provides a temporary monthly benefit to 68,887 Pennsylvanians who are sick, disabled or escaping an abuser. It ends next month

Cuts to education enacted last year, meanwhile, have diminished the quality of instruction in our poorest school districts and resulted in the loss of 14,000 jobs in 2011.

The budget squeezes money out of human services, education and General Assistance at the same time it expands and creates new tax credits and continues the ongoing phase-out of the capital stock and franchise tax. This is part of a decade-long pattern that will see the commonwealth spending $2.4 billion on corporate tax breaks in the new budget. That amount has tripled over the last 10 years and does not count the hundreds of millions of dollars lost annually to corporate tax loopholes. Most of these tax breaks primarily benefit the largest corporations and come with no commitment to create jobs.

As the economy continues to recover, Pennsylvania will need to make public investments to build a strong economy and make Pennsylvania a place where families will want to live. This budget takes a small step in that direction, but falls well short of where we need to be.

Check out the center’s budget analysis for more.

PA Starts New Fiscal Year with $400 Million in the Bank

By Michael Wood, Third and State

After a less than stellar May, General Fund tax collections bounced back strongly in June – exceeding estimate by $170 million, or 6.5%. This narrowed the 2011-12 revenue shortfall to $163 million, or less than 1% of total estimated collections for the year.

As a result, the state ended the year in a much better fiscal situation than projected back in February, when Governor Tom Corbett released his budget plan. Counting the dollars the state had in the bank, Pennsylvania actually started the fiscal year with a $400 million fund balance.

The recently enacted budget acknowledged this but only to a point. The Legislature increased General Fund spending in 2012-13 by $655 million from the Governor’s  proposal – restoring funding in a number of important areas: higher education, accountability block grants, and half of the 20% cut proposed for county services included in the now-rejected Human Services Development Block Grant. Lawmakers also found funding for another round of business tax breaks.

However, June collections indicate more could have been done – for General Assistance recipients, environmental programs, and child care. Lawmakers also passed on setting aside any of the additional revenue in the Rainy Day Fund.

Click here for the Tale of the Tape.

The revenue surplus in June was led by corporate tax collections – coming in $180 million higher than the monthly target, or 38%. After falling short of estimates for seven of the first eight months of the fiscal year, corporate taxes ended June with a small surplus of $39 million, or 0.8%.

Personal income tax collections were also surpassed estimate in June by $26 million, or 2.7%. For the fiscal year, PIT collections were $199 million, or 1.8%, below expectations – not a surprise given the slower-than-expected decrease in the unemployment rate and general sluggishness in the economy.

Sales tax receipts were $46 million, or 5.5%, lower than expected in June. This pushed yearly sales tax collections slightly below estimate ($16 million, or 0.2%).

All major categories of taxes grew in 2011-12. In total, they exceeded 2010-11 levels by $688 million, or 2.6%.

The Human Cost of Eliminating General Assistance in Pennsylvania

 

By Kate Atkins, Third and State

Since the Great Depression, Pennsylvania has had a General Assistance (GA) program – a small cash benefit that serves as a bridge to self-sufficiency for the temporarily disabled and for victims of domestic violence and addicts seeking help to turn their lives around.

Since the Great Depression. Until late last month when state lawmakers adopted a new budget.

That budget will end Pennsylvania’s modest benefit for 68,000 people, effective August 1. At $205 per month, nobody was getting rich from the program. Here is a sample of who is using General Assistance and why:

A disabled military veteran in Lancaster County, who applied for General Assistance to get him through until his Social Security disability benefits were approved.

A waitress in her 50s who was diagnosed with breast cancer and used General Assistance when she could not work as she was receiving chemotherapy and radiation treatment. After about nine months, she was able to return to work.

Good Samaritans who are caring for children not related to them – perhaps children of a close friend of neighbor. Many of these children are now likely to end up in the foster care system.

A very focused group of young women I saw at a recent rally in Delaware County, who chanted: “Pennsylvania, we need GA. We’re in treatment, we need to stay!”

A former addict whose recovery was aided by General Assistance who is now employed in a job that allows him to pay taxes, support his daughter, and help others struggling with addiction.

“I didn’t need a couple days of rehab; I needed long-term care,” recalled Jake Fleming, care manager for NorthEast Treatment Centers and a former addict. “General assistance saved my life.”

The state ended the year with a $649 million surplus, more than enough to preserve the General Assistance program. Instead, the legislature chose to end the program, likely increasing the state’s overall spending as people facing very challenging life circumstances end up in emergency rooms, prisons, and inpatient mental health facilities. 

As the changes go into effect August 1, this promises to be a hard summer for tens of thousands of people.

Piecing Together the PA Budget Framework

(Important news… – promoted by John Morgan)

By Chris Lilienthal, Third and State

Some details emerged Thursday about the state budget framework unveiled midweek by Governor Tom Corbett and legislative leaders, but questions still remain. More details may be available later today when budget spreadsheets are released.

Funding for county human services is one area that appears to be in flux, as some House Republicans continue to voice concerns about a plan to block grant and cut that funding. 

A number of GOP House lawmakers want to add more dollars for the mental health and mental disability programs in that mix, said [Rep. Mario] Scavello.

A Senate-approved bill restores half of the $168 million spending cut for the human services programs initially proposed by Mr. Corbett. House members would like to restore even more money but have to balance that with cuts elsewhere, he added.

Although the statewide association representing county commissioners recently agreed to a two-year phase-in for the block grant, Rep. Gene DiGirolamo, R-18, Bensalem, chairman of the House Human Services Committee, said he’s trying to stop the block grant altogether and substitute a pilot program for several counties instead …

The seven programs considered for a block grant include community mental health and mental disability services, the human services development fund, homeless assistance, child welfare grants, the Behavorial Health Services Initiative and Act 152 drug and alcohol treatment programs.

While there is some hope for restoring more funds to county human services, one area that appeared not to make the cut is the state’s General Assistance Program. The governor proposed – and legislative leaders appear to have agreed to – eliminating this modest benefit for temporarily disabled adults, which will have a devastating on nearly 70,000 Pennsylvanians striving to avoid homelessness and build a better life for themselves.

One item unlikely to survive, despite protests from church groups and advocates for the poor, is the so-called general assistance program that provides cash benefits to nearly 70,000 temporarily disabled adults. Corbett proposed eliminating the funding, and legislative leaders did not seek to restore it.

Brenda Freeman of West Philadelphia, who has peripheral edema, which swells tissues in her arms and legs, said that program had been “my only income.” Freeman, 38, whose condition makes it very difficult to stand or sit for long periods and who telephoned The Inquirer to protest the cut, said: “What am I going to have to do – eat out of a trash can?”

“There still is a chance to do something,” she said. “I’m hoping that they do the right thing.”

Pennsylvania’s public schools and universities are likely to see no change in their funding, after sustaining deep cuts in the budget enacted last year.

On Thursday afternoon, the House Appropriations Committee approved funding bills for the four state-related universities as well as the Veterinary School at the University of Pennsylvania.

Though he stopped short of confirming that the schools – Penn State, Temple and Lincoln universities and the University of Pittsburgh – would be flat-funded at current levels, “we are working toward that idea,” said Drew Crompton, the chief of staff to Senate President Pro Tempore Joe Scarnati, R-Jefferson.

The four schools were targeted for 30 percent cuts in Corbett’s $27.14 billion budget proposal unveiled in February. An amended version of the budget approved by the Senate this spring would fund at current levels: Penn State at $227 million; Temple at $139 million; Lincoln at $11 million and the University of Pittsburgh at $136 million.

Crompton said budget negotiators are moving in a similar direction with the state system schools … The schools would be maintained at their current level of $412 million.

Finally, multiple newspapers are reporting that Accountability Block Grants, which support full-day kindergarten and other early childhood programs, will be restored to $100 million after the governor proposed eliminating them. More funding will likely be approved for distressed schools and to expand the state Educational Improvement Tax Credit Program, which allows businesses to donate to private school scholarships and recover most, if not all, of their contribution through tax benefits.

Rep. Mike Vereb, R-Montgomery, said negotiators told him the tentative agreement includes $25 million to expand the current Educational Improvement Tax Credit program, which is currently funded at $75 million. An additional $50 million would be available to students who attend a school among the state’s lowest-achieving 15 percent.

The Myths Behind Governor Corbett’s PA Budget Myths

By Sharon Ward, Third and State

Governor Tom Corbett’s May 21 newsletter offered up responses to five “myths” the administration claims are circulating about his proposed budget for next year. The Pennsylvania Budget and Policy Center examined these myths and the myths behind the myths to give you a clear picture about what is fact and what is fiction in Harrisburg.

Governor’s Myth #1: Pennsylvania spends more money building prisons than building schools. 

We’re not sure where this one came from, but we will give it a whirl.

Fact: The Corbett administration’s budget includes a moratorium on new school construction projections, and NO FUNDING for school district projects in the pipeline.

Fact: If the Governor’s proposed plan for higher education is adopted, Pennsylvania will spend twice as much on prisons as it does on colleges. In 2009-10, the state’s corrections budget was $1.8 billion and college funding was $1.5 billion. If the Governor had his way, Pennsylvania would spend $1.9 billion on corrections and $980 million on colleges in 2012-13.  

Fact: It costs the state much more to house prisoners than it does to educate a child. In 2011-12, Pennsylvania will house 49,000 inmates at a cost of $35,188 per inmate and spend $9.3 billion to educate 1.8 million students at a cost in state dollars of $5,305 per child.

Fact: It is better to build schools than to build prisons. 

Governor’s Myth #2: The reductions in higher education funding will cause universities to raise tuition.  

Well, cutting college funding is certainly not going to help keep tuition down.

Fact: Public subsidies keep college tuition more affordable. In 2009-10, the average cost (nationally) of a public four-year college education was $15,014, while the average cost of a four-year private college was more than double at $32,790.  

Fact: From 1999 to 2011, Pennsylvania’s state funding for higher education fell by 12%.

Fact: The Governor and General Assembly cut public colleges by 20% last year, and the Governor proposed to cut 30% more this year.  

Fact: Pennsylvania ranked 46th in public college funding as a share of personal income in 2011-12.  

Fact: Our economy can’t grow if our children don’t have a college education.

Governor’s Myth #3: The proposed budget reduces funding for K-12 education and will force school districts to raise property taxes.

That’s no myth, that’s a fact.

Fact: The budget proposed by Governor Corbett and enacted by the General Assembly in June 2011 gave school districts $860 million less than they received the previous year. That included a reduction of 7%, or $421 million, in the basic education subsidy.  

Fact: The Governor’s cuts killed jobs. School districts cut programs, raised taxes and eliminated positions. In 2011, the state lost 14,000 jobs in public schools and universities.

Governor’s Myth #4: The elimination of cash assistance will mainly hurt children and victims of domestic violence.

Fact: In February, the Governor proposed eliminating the General Assistance program. The Governor is right: most of those affected are people with a permanent disability waiting for approval for Social Security disability benefits, or those who have an addiction and are eligible to receive the $200 monthly grant for seven months, in their lifetime.  

Fact: Women and children lost their health care, not cash assistance, when the Department of Public Welfare did a quick and dirty eligibility review and threw 88,000 kids out of state health insurance programs. Moms, seniors and people with disabilities (the only ones who can get health care coverage through Medical Assistance) lost their coverage too.

Fact: The budget cuts vulnerable adults as well as children. Do you feel better now?

Governor’s Myth #5: The proposed budget reduces funding for the arts.

Fact: The Governor has level-funded grants for the arts for two years. What has gone by the wayside is arts and music education that have been slashed by school districts as a result of the cuts to education (see Myth #2).

Let the Games Begin: PA Senate Announces Details of Budget Proposal

By Sharon Ward, Third and State

Action on the state budget began in earnest Monday with state Senator Jake Corman, chairman of the Appropriations Committee, releasing important details on the Senate budget plan that will be advanced this week.

The proposal would increase Governor Tom Corbett’s budget proposal by $500 million, with total spending rising from $27.15 billion to $27.65 billion for 2012-13. The Senate plan rejects $191 million in fund transfers and new revenue and proposes new spending cuts of $165 million. Those spending reductions were not yet detailed.

According to a Capitolwire.com report (subscription required), the Senate budget plan:

  • Restores $245 million to higher education;
  • Does not include block grants for county human services or basic education;
  • Reduces the county human services funding cut from 20% to 10%;
  • Restores $50 million to Accountability Block Grants (which fund quality pre-kindergarten and full-day kindergarten); 
  • Restores $14 million in cuts to early childhood education;
  • Reduces the transfer from the Keystone Recreation, Park and Conservation Fund (Key ’93 Fund) from $38 million to $19 million; 
  • Cuts PHEAA by $8 million rather than the $19 million proposed by the Governor; and
  • Maintains $59 million for the CURE health research program in the Tobacco Settlement Fund.

Senator Corman, who announced the details, said the Senate wanted to take a step back on the proposed education block grant because “a lot of people are opposed to it” and will wait to get more feedback from school districts. On the human services block grant, Corman said, “we did not get into whether it is block granted or not.” 

It’s not clear that a 10% cut in county human services will seem like much of a victory to the folks fighting that battle. And since House leaders had been talking $100 million for Accountability Block Grants, there may be some trading to come. It’s not clear whether we can get a spend number higher than $27.615 billion so there is a lot more work to be done.

Will welfare programs get cut again?

The Senate plan includes $40 million in revenue from “recalculating Social Security and welfare costs.” The Social Security side is what school advocates have identified as double counting on charter school Social Security payment. The $165 million in unspecified spending cuts, plus the welfare savings, could be a cause for concern.

The preliminary revenue estimate released by the Independent Fiscal Office (IFO) last week provided crucial cover to state lawmakers who have been hammered for months in Harrisburg and in the press about the consequences of the Governor’s proposed cuts. The IFO, which was established precisely for the purpose of providing a revenue estimate “independent” from the Governor, projects that Pennsylvania will end the current fiscal year with about a $400 million balance, and raise $400 million more than originally projected in the new fiscal year.

To make the Senate plan more palatable to lawmakers, especially those in the House loathe to spend a dime more even if bridges are falling down around them, Senator Corman argued that the spending plan would meet TABOR targets. That, of course, should send shivers down all of our spines.  

TABOR – the Taxpayer Bill of Rights – is the failed experiment in Colorado, which limited state spending to a formula of inflation plus population growth. If tax collections run higher than that, officials are supposed to send the money back to taxpayers as a rebate. In 2005, voters in Colorado passed a referendum suspending this crazy system for five years. 

Why would voters turn down a tax rebate check? I guess they tired of the gimmick. The last time I looked, local governments had passed 1,400 tax increases to make up for state funding cuts.

Nowhere to Go, More Addicts on the Street and a Ringing Irony

Based on blog posts by Chris Lilienthal originally published here and here at Third and State.

The Philadelphia Inquirer reports this morning on the impact of Pennsylvania Governor Tom Corbett’s proposed budget cuts on the lives of people in Southeastern Pennsylvania. Who is getting hit? Adults with disabilities, the homeless, people with mental-health illnesses, HIV patients needing hospice care, children aging out of foster care, and seniors, among others.

Miriam Hill, The Philadelphia InquirerPeople who will be affected by Corbett’s cuts:

Brittany Stevens doesn’t talk a lot, but she’s a bit of a social butterfly. She was a prom queen and, after a recent performance of the musical Fela!, she spontaneously hugged the dancers, nearly tackling them in excitement.

But Brittany, 21, who is disabled and suffers from seizures, incontinence, hearing loss, and other problems, spends most of her days alone in her North Philadelphia home, while her mother, Harlena Morton, goes to work as a high-school counselor.

Morton had hoped to find Brittany a job in a workshop that employs disabled adults. Now that Gov. Corbett has proposed large cuts to social services programs, Morton fears that Brittany and thousands like her will never get off waiting lists for those spots and for other services…

In Philadelphia, the cuts total about $120 million, not including reductions in medical care, city officials say; across Pennsylvania, $317 million, according to state officials.

The Governor’s 2012-13 budget proposes to completely eliminate the General Assistance Program, which provides a time-limited, modest $205 per month benefit to people who are sick or disabled, completing addiction recovery programs or children who would otherwise be in foster care. Again, from the Inquirer:

Michael Froehlich, a lawyer for Community Legal Services, who opposes eliminating general assistance, says the programs are a lifeline for many people, including about 800 children being taken care of by people who are not family members. Many of the caretakers are “Good Samaritans,” and without them, the children likely would be in foster care, which is significantly more expensive, Froehlich said.

“General assistance is an efficient, relatively speaking, way to take care of Pennsylvania’s most vulnerable citizens,” he said.

Philadelphia City Paper delves even deeper into the likely fallout from eliminating General Assistance. The long and short of it is that fewer people living on the edge will get the help they need to get back on their feet. And that could produce some public safety concerns.

For an estimated 1,000 to 4,500 recovering addicts in the city on any given day, the only option for getting clean in Philadelphia is checking into one of more than 300 informal recovery houses scattered across Kensington, Frankford and North Philly. It’s a fragile network, administered mostly by former addicts and funded largely through residents’ welfare dollars, in particular the nine-month, one-time General Assistance (GA) payments offered by the Commonwealth.

In Gov. Tom Corbett’s proposed budget for the coming fiscal year, GA is eliminated altogether. Advocates say the impact could be devastating, affecting 34,843 Philadelphians who receive GA money (including people with disabilities and survivors of domestic violence) and pushing thousands of addicts out onto the street.

“If you cut all this, the bottom line is that the streets are going to overflow with people,” says Anthony Grasso, co-owner of the Next Step recovery house in Frankford. “Do you know how many people are going to commit more crimes to get what they need?”

Finally, as Supreme Court arguments on the constitutionality of the Affordable Care Act wrapped up Wednesday, I found this editorial from the Harrisburg Patriot-News particularly interesting.

The ringing irony about this week’s U.S. Supreme Court challenge to the Affordable Care Act is that the law’s core principles were all, originally, conservative. And when they were first promoted, almost no one said they were unconstitutional. …

As late as 2007, Democrats and Republicans introduced a bipartisan bill that included an individual mandate – still seen as an essentially conservative idea. [Former U.S. House Speaker Newt] Gingrich in 2007 argued that “citizens should not be able to cheat their neighbors by not buying insurance, particularly when they can afford it, and expect others to pay for their care when they need it.” 

In other words, the individual mandate is not creeping socialism. It is the opposite. It is about requiring citizens to take individual responsibility in the arena of health care, where the inaction of some costs taxpayers billions of dollars each year.

Food for thought as you listen to commentators, activists and politicians rail against a law that ends coverage bans for pre-existing conditions and other insurer abuses, provides better preventatives care to everyone, ensures children can see a doctor when they get sick, and gives families the tools they need to take responsibility for their health coverage.

The Future of Health and Human Services in PA

Sharon Ward, director of the Pennsylvania Budget and Policy Center, was on WITF’s Radio Smart Talk in Harrisburg this week to discuss the state of health and human services in Pennsylvania. She squared off with Matt Brouillette of the Commonwealth Foundation.

She explained that it was important for the commonwealth to spend taxpayer money wisely, but that current policies were resulting in eligible Pennsylvanians, including thousands of children, losing their health care.

Rather than taking away health care from children or jeopardizing the nursing care of seniors, state policymakers should look at alternatives, including closing tax loopholes and ending corporate welfare.

You can listen to the show at WITF’s web site. Let us know what you think in the comments section.

Combine and Cut: Governor’s Block Grant Plan for County Human Services

A blog post by Chris Lilienthal, originally published at Third and State.

A week after Governor Tom Corbett rolled out his state budget, many people are still trying to make sense of it.

Perhaps the biggest reshuffling in the Department of Public Welfare budget involves the expansion of the Human Services Development Fund, a flexible funding stream used for a wide variety of human services at the county level. This fund has been repeatedly reduced over the past few year. The new budget combines and cuts funding for other programs into a single Human Services Development Fund Block Grant.

All told, the new block grant is funded at nearly $674 million. That reflects a cut of more than $168 million, or 20%. Portions of a variety of health and human service programs ranging from homeless assistance to mental health services to protecting children from abuse would be impacted (see the table below).