At his mid-year budget briefing this week, Budget Secretary Michael Masch said state revenue projections were pretty much in line with actual collections, but a slowing economy is making itself felt.

Secretary Masch also projected how an expected $300 million in revenue from slots parlors will be spent, including support for state-owned conservation lands.

Masch’s review included status reports on state revenue collections and spending, highlights of key Rendell Administration Programs and gave a hint at the general issues to be covered in the Governor’s budget proposal in February.

Masch said seven key issues will affect the remaining months in this year's budget and the preparation of next year's spending plan— slower economic growth, transportation/transit costs, health care cost inflation, Pennsylvania’s aging population, increasing offender population, pension and post-employment costs and collective bargaining agreements due to expire in 2007.

Masch said the Governor will be requesting $22.6 million in supplemental appropriations in several areas, including medical assistance, flood relief and gypsy moth and black fly spraying.

He also noted the Rendell Administration will commit $295 million of the $625 million Growing Greener II bond issue fund by the end of fiscal year 2006-07. $226 million was committed in the first year-- $80 million to DEP, $70 million to DCNR, $22 million to Agriculture, $11 million to DCED, $25 to Fish & Boat Commission and $7 million to Game Commission. There was no separate breakout of how much funding went directly to counties as required by Growing Greener II.

Among the environmental budget issues to be tackled next year will be: funding the Hazardous Sites Cleanup Fund and the Nutrient Management Fund, which are both set to run dry by July 1.

Over the last two years $50 million to fund the Hazardous Sites Cleanup Fund has been taken away from the original Growing Greener Program which finances watershed cleanup, abandoned mine reclamation and other conservation projects.

In the coming year, funding for debt service to pay for the Growing Greener II bond issue approved in 2005 by voters is also authorized to be taken from the original Growing Greener Program.

In the current budget (2006-07), $52.7 million was diverted from DCNR’s Keystone Recreation, Park and Conservation Fund to the General Fund as a “one-time” measure to balance the budget.

The full PowerPoint Briefing is available online.

Secretary Masch’s mid-year budget brief included how more than $300 million in projected gaming revenues will be spent between now and July 1 on nine different program areas, including $200 million for expedited senior citizen property tax relief.

Here’s a rundown on how the projected revenues would be spent—

DCNR In-Lieu-of Tax Payments ------------------------- $ 4,800,000

Game Commission In-Lieu-of Tax Payments ----------- $ 3,400,000

Fish & Boat Commission In-Lieu-of Tax Payments ---- $ 72,000

Compulsive Problem Gambling Treatment Fund -------- $ 1,500,000

Local Law Enforcement Grants ---------------------------- $ 5,000,000

Volunteer Fire/Medical Companies Grants -------------- $ 25,000,000

Volunteer Fire/Medical Companies Grant Repayment - $ 25,000,000

General Fund Loan Repayment ---------------------------- $ 36,100,000

Expedited Property Tax Relief ----------------------------- $200,000,000

Total ---------------------- $300,921,000

12/22/2006