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Senator Pat Browne


Senate Appropriations Committee Report
April 2017

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Inside this Edition

  • Governorís Tax Credit Reduction Proposal
  • House of Representatives Proposed Budget
  • Governorís Complement Cap
  • March 2017 Revenue Estimate vs Actual

Where We Are In the Annual Budget Process

After concluding on March 9th three weeks of hearings on Governor Wolfís FY 2017-18 budget proposal, the Appropriations Committee is now conducting in-depth reviews of the budget proposal. These reviews are designed to validate assumptions that were used in the development of the budget and to prepare for the Governorís Spring Budget Update, which is usually provided in May.

Governorís $100 Million Tax Credit Reduction Proposal

As part of his Fiscal Year 2017-18 state budget recommendation, Governor Wolf proposed a $100 million reduction in the amount available for tax credits by converting the current array of tax credit incentives into a block grant. The Administration has indicated it would give priority to those tax credits with proven results and would limit those it determines to be less effective. Aside from that limited information, the Administration has provided very little detail to show exactly how the block grant proposal would work, what parameters will be used to make decisions regarding which credits will be affected and how much funding specific tax credit programs could lose.

Given the lack of specificity on the proposal, the General Assembly will need to carefully assess the Governor's proposal before determining whether it will become part of the final budget agreement.

House of Representatives Releases Its 2017-2018 Budget Proposal

On April 4th, the House of Representatives passed its Fiscal Year 2017-18 state budget. The Houseís budget cuts more than $815 million from the Governorís proposed budget through 6.5% reductions to agency operating budgets and significant reductions and eliminations of discretionary programs. The Houseís budget does accept the proposed mergers across criminal justice agencies as well as in health and human service agencies in the Governorís proposed budget, but does not appear to accept the Governorís proposal to lease the Farm Show building or to bond finance select grant programs. The Houseís budget does not rely on any tax increases. No other details on the Houseís revenue package were available at the time of the printing of this monthís newsletter.

Senate Appropriations

Update on Governorís Complement Cap

In early December, Governor Wolf restricted staffing levels to the number of employees Commonwealth agencies had as of December 2, 2016. Commonwealth agencies had approximately 74,000 filled positions in early December. Under the revised complement cap, agencies are permitted to fill positions if their staffing levels drop below the December 2, 2016 level or if the Governorís Office grants an exception to the complement cap.

Overall filled staffing levels are now nearly 600 positions below December 2, 2016 levels. This drop in filled levels has been driven by Governor Wolfís decision to lay off 500 Labor and Industry employees supported by the Unemployment Compensation Administration Fund at the end of last year.

Through the end of December, General Fund agencies continued to fill positions above the December 2, 2016 level, but overall General Fund staffing levels are now below that level by about 150. Some agencies continue to have staffing levels above their complement cap.

The Administration indicated the December 2, 2016 staffing levels became the basis for developing the Governorís FY 2017-18 budget proposal and that no vacant positions were funded in the Governorís request.

While our committee has not completed its in-depth review of the Governorís proposal, early analysis has discovered funded vacant positions throughout agency budget materials. Based on the continuing poor revenue performance, we are not likely to be able to budget for positions above the Governorís December 2, 2016 level.

Revenues Come Up Short of Projections Again for the Month of March

Senate Appropriations

General Fund revenue collections for the month ended March 2017 totaled $4.42 billion, which was $229.6 million, or 4.9%, below the monthly estimate. Fiscal year-to-date collections total $22.4 billion, which is $679.3 million, or 2.9%, below estimate for the year. March is typically the largest revenue collection month of the year.

Senate Appropriations


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Allentown, PA 18101
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Coplay, PA 18037
610-769-5566
FAX: 610-769-5568
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