Appropriations Committee Approves FY 09-10 Budget Proposal

$27.3 Billion Plan

The Senate Appropriations Committee today approved Senate Bill 850, a $27.3 billion state budget for Fiscal Year 2009-10, according to Committee Chairman Senator Jake Corman (R-34).

“Senate Bill 850 reflects and responds to Pennsylvania’s tough economic climate. The fact that state revenues came in nearly $1 billion below estimate in April shows that Pennsylvania’s economy hasn’t improved and that we are facing a potential total shortfall of $2.9 billion or higher by the end of the current fiscal year,” Senator Corman said. “Taking that into account, we developed a budget for Fiscal Year 2009-10 that looks to the long-term future of Pennsylvania and considers the Commonwealth’s economic vitality in 2015 and 2020, not just 2010.”

During a milder recession in the early 1990s, Pennsylvania experienced a similar catastrophic revenue shortfall when the Commonwealth amassed a billion dollar deficit and, in response, raised taxes by $3 billion. That response devastated the Commonwealth’s economic climate and reduced its competitiveness with other states.

“Unlike in 1991, Senate Bill 850 takes a different tack by making painful but necessary cuts and reductions in spending now as a way to hasten the revitalization of Pennsylvania’s economy, which is ultimately the most effective remedy for the Commonwealth’s budgetary woes,” Senator Corman said. “We are working to position Pennsylvania for the future by making tough decisions today. The Legislature will be called on to share its burden of cuts as well – and we are committed to doing that. The General Assembly’s operating line items are reduced by about 10 percent. In addition, we are proposing that $100 million of the General Assembly’s reserves be redistributed into the General Fund.”

SB 850 recognizes the key role of education at all levels in shaping Pennsylvania’s future. By allocating more than $728 million in federal stimulus funds for basic education, this budget staves off a reduction in support for Pennsylvania’s school districts and maintains funding at the current year level.

“In addition, $720 million in federal stimulus money goes directly to Pennsylvania school districts through existing funding streams. When considering the Commonwealth’s funding for basic and special education, the new money represents a significant increase over the current fiscal year,” Senator Corman said.

Tim Nyquist
Phone: (717) 787-1377