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PA budget and expanded Medicaid

By Fritz Mayer
June 12, 2013

HARRISBURG, PA — The Pennsylvania budget for the next fiscal year is due to be complete by June 30. The Pennsylvania House Appropriations Committee last week approved a $28.3 billion budget, which was similar to the one proposed by Tom Corbett in February but spends $100 million less than Corbett. The house budget would increase spending over last year by 2.1%. Education spending would be increased by $100 million. But neither budget mentions additional revenue that the state could gain by accepting and expanded Medicaid program as part of the Affordable Care Act.

The legislature’s fiscal office has reported that if Pennsylvania accepts expanded Medicaid, that would add about $435 million to the state’s revenue and would provide health insurance for about 500,000 state residents who now have no coverage.

Accepting expanded Medicaid would also create about 285,000 jobs over the next decade. The cost of the program would be paid for entirely by the federal government over the first three years; then the state government would be required to pay about 10% of the cost.

Democrats in the house and senate have been nearly constant in trying to pressure Corbett to accept expanded Medicaid over the past months, and the budget proposal the Senate Democrats put forward does include revenue from the program.

Senate Democrat Jay Costa said that by using revenue from the program, the senate budget would increase spending on education by an additional $200 million, and their budget would spend $115 million on job creation and job training programs. Like the other proposed budgets, the Democratic plan would not raise income taxes.

Representative Mike Sturla said the budgets put forward by Corbett and the house Republicans represent about $1 billion less for education spending than when Corbett first took office. He said accepting expanded Medicaid would bring $43 billion into the state over the next decade.

Sturla and other Democrats have also complained about the lack of spending on state infrastructure in the proposed budget, which should be done now because the cost of borrowing is historically very low, and capital spending on major projects would create jobs. He said, “Unfortunately, when this governor took office the state was seventh in the nation in terms of our economy and our job creation, we’re now 49th. There’s been billions of dollars of corporate tax cuts that have gone to foreign corporations that this administration has done and that the Republican legislature has approved, and it has resulted in a net loss of jobs.”