What’s In There? A Budget Primer

Kristi Pronovost ABC's Keystone Center Apprenticeship Blog, Merit Shop Spokesman Blog

By: Brent Sailhamer, Director of Government Affairs

With the Pennsylvania Senate set to vote on the 2018-2019 general appropriations bill, commonly referred to as the “budget,” this week, it looks like the legislature will wrap up early or on time for the first time in several years. The bill passed the House earlier in the week by an overwhelming vote of 188-10, signaling broad, bipartisan support for the fiscal measure. But the single bill isn’t the only piece required to complete the annual process, and most of the other components, which are arguably equally as important, rarely get any attention. So here’s a quick explanation of some of the vehicles that make up the budget process:

    • General appropriations (GA) bill:  The GA bill provides a broad outline for how money is to be appropriated, or spent, for the coming year. This year’s GA bill provides $32 billion in spending to various departments within the administration, including Labor & Industry, Education, and Environmental Protection.
    • Fiscal Code bill:  The Fiscal Code bill is the closest companion to the GA bill and outlines the various sources of revenue that are utilized to pay for the GA bill expenditures. Frequently several hundred pages long, the Fiscal Code authorizes inter-agency fund transfers, as well as the use of revenue-bearing accounts like the Oil & Gas Lease Fund, the Tobacco Settlement Fund, and the Vocational Rehabilitation Fund. The Fiscal Code is also often used as a vehicle for so-called “earmarks,” or fund transfers to specific projects rather than broad programs. In previous years, the Fiscal Code has come under scrutiny as a vehicle for non-budget related changes, which the Pennsylvania Supreme Court ruled was in violation of the single subject rule, prohibiting legislation that addresses more than one topic.
    • Tax Reform Code bill:  The Tax Reform Code bill is also a vehicle responsible for managing the level of annual revenue that Commonwealth utilizes each year, but it is more specifically limited to adjustments in existing and the creation of new taxes. Alterations to the state’s personal income tax and sales tax must be included in this bill, as do changes to the state’s tobacco tax and liquor excise tax.
    • Public School Code bill:  The annual Public School Code bill amends the original Public School Code of 1949 and is responsible for major changes to Pennsylvania’s education system. While the GA bill appropriates a lump sum for basic education funding throughout the state, the school code defines the formula for how each district receives funding. The bill also includes major changes to education policy, such as teacher furloughs or school safety measures, and defines levels of spending for education-related programs like the Educational Improvement Tax Credit (EITC) program.
    • Administrative Code bill:  The Administrative Code bill is responsible for the organization of the Commonwealth’s administrative agencies, the various boards and bureaus under their direction, and the many independent agencies that operate throughout the state.  In 2017, the budget process resulted in the consolidation of the Department of Drug & Alcohol Policy, the Department of Health, the Department of Aging, and the Department of Human Services, however it required a change to the Administrative Code to legally authorize the consolidation.  The Administrative Code is also used to create or eliminate various appointed boards and commissions.
    • Public Welfare Code bill:  The Public Welfare Code bill addresses the expenditure of nearly $13 billion in state funding each year through medical assistance programs, vocational rehabilitation programs, and family assistance.  The bill utilizes the large-scale appropriations defined in the GA bill and further divides the available funding throughout the myriad programs available under the Department of Health and Human Services. While the welfare code also authorizes the acceptance of federal funding for assistance programs, it defines policy changes for existing programs.  In 2017, the welfare code was the vehicle for the Road to Economic Self-sufficiency through Employment and Training (RESET) program, which mandated that individuals enrolled in welfare programs must actively be seeking employment.
    • Human Services Code:  The Human Services Code  focuses on health and aging policy, while also defining the formula for local government funding for assistance. The bill outlines the annual appropriation to counties for nursing home operation, authorizes interstate agreements and federal funding for human services, and carries changes to the state plan for personal care.  The bill also offers policy changes for in-home care, nursing care, day care, and other support services for seniors, children, and adults with special needs.

 

June 21, 2018