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State Budget Springs Another $800 Million Leak

 

As if a $1 billion budget deficit wasn't enough, two stories this week may deepen the state's already terrible budget woes making additional cuts and even layoffs more of a possibility.
           Commonwealth Court sided with hospitals and physicians in a 4 to 1 decision saying the General Assembly and Gov. Rendell could not transfer $800 million in "surplus" funds in the MCare account to help balance the FY 2009-10 budget.  The MCare Fund is used to pay the medical malpractice insurance for physicians.
            At a press conference, Gov. Rendell said he would appeal the decision.
            Acting Revenue Secretary C. Daniel Hassell told the Senate Finance Committee this week during his confirmation hearing higher electric prices in the PPL territory as a result of rate caps expiring have not yielded higher state revenues.  In fact, the electric gross receipts tax was $145 million under estimates adding to the $240 shortfall for the month of March.
            Senate Republicans and Gov. Rendell were counting on a larger revenue stream after the rate caps cam off to fund the debt service on the $650 million energy bond issue passed in 2008 to fund alternative energy, energy efficiency, weatherization and low income energy assistance projects.
            NewsClip: State Told To Repay MCare Fund $800 Million

 


4/19/2010

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