Pennsylvania State Budget Cuts Announced

From Pennsylvania Partnerships for Children (


With the approval of the Education Jobs and Medical Assistance Act by Congress, Pennsylvania is slated to receive $667 million of state assistance to help with costs for the Commonwealth’s Medicaid program and $388 million to help school districts save teacher jobs. But even with this extra assistance, the 2010-11 state budget still requires $282 million in additional cuts. When the 2010-11 budget was approved in July, policymakers estimated that Pennsylvania would receive $850 million from extension of the increased matching rate for the Federal Medical Assistance Percentage (FMAP). Despite receiving less than expected, the extension of FMAP was welcome news to policymakers and children’s advocates. Cuts would have been much deeper without any FMAP assistance.


For more on Congressional action to approve the Education Jobs and Medical Assistance Act, please see our FEDERAL UPDATE (, beginning on p. 6).


Without the full FMAP allocation, and a $282 million budget hole to cover, Governor Rendell proposed several steps to make up the difference:


  • Trim $50 million from the $250 million increase for basic education.
  • Cut state agencies’ discretionary budget lines by 1.9 percent across the board. Cuts totaled about $212 million. These funds will be placed in budgetary reserve, so if state revenues were to rebound at some point within the fiscal year, these cuts could be restored.
  • Lay off 100 state employees. Layoffs will be fewer than proposed earlier this year because more people have retired than expected.
  • Raise $70 million through a tax on natural gas drilling. Legislative leaders have agreed to a levy, also called an extraction tax, but details must be enacted this fall.

Children and families will be unable to avoid the brunt of the cuts. In addition to basic education, county child welfare, child care assistance, community-based family centers and other education programs — Accountability Block Grants — Pre-K Counts, the Head Start Supplemental and more will receive less state funding.


For a more complete picture on the 2010-11 budget freezes, please see the budget table at (p. 2).

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