Gov. Rendell’s Budget Secretary Michael Masch gave legislators their mid-year briefing on the state budget this week. Although General Fund revenues are about 2.1 percent ahead of projections, the Secretary outlined some budget “challenges” ahead.

Right now there is likely to be a $1.5 billion “challenge” (hole) to fill in next year’s budget, along with the need for about $164 million in supplemental funding this year for increased welfare and unanticipated flood recovery costs.

State budget writers will have to find a way to plug several “challenges:”

Ø $450 million in Department of Public Welfare (DPW) medical assistance

Ø $400 million in fee income not implemented by DPW

Ø $378 million in non-recurring federal aid

Ø $166 million in Temporary Assistance for Needy Families (according to one group)

Ø $50 million in county welfare payments

Add to these “challenges” the need for up to $250 million more to fund mass transit, an expected multi-million “human capital” development initiative next year; $60- $80 million to bring Community College funding back up to previous levels; $20 to $40 million to make the Hazardous Sites Cleanup Fund whole and whatever the General Assembly and Administration settle on for the Growing Greener II environmental spending initiative.

This is the budget landscape that will face the Governor and General Assembly when they return to work in January.

NewsClips: PA Budget Warning Issued

National Perspective on State Budgets

12/17/2004