Rep. Otten's budget statement

Outlines missed opportunities

Rep. Danielle Friel Otten July 1, 2021

Last Friday, the General Assembly approved a $40 billion budget and sent it to Governor Wolf for his signature. While it is the constitutional duty of the General Assembly to pass a balanced budget, it is my responsibility to advocate and vote for a budget that will address our Commonwealth’s ongoing challenges and reflect the values and priorities of my district.

Although this budget includes increased funding for education and level-funding for many environmental funds and other state programs, it falls far short of our obligation and ability to fully fund our schools and help Pennsylvanians and small businesses truly recover from the COVID pandemic. Furthermore, it irresponsibly leaves BILLIONS of dollars in revenue unallocated and unaccounted for. For these reasons, I voted No.

With $7 billion in American Rescue Plan (ARP) funds and more than $3 billion in greater-than-expected state revenues, the General Assembly had a once-in-a-generation opportunity this year to invest in Pennsylvania and put us on a path for economic recovery and strong tax revenues for the next fiscal year. Instead, we are curling up in the fetal position, squirreling away money, and waiting for the next shoe to drop. The budget leaves 85% of our federal ARP funds unused, sending about $2.6 billion in federal funds to the state’s Rainy Day fund and leaving $2.7 billion unallocated in the General Fund for undisclosed purposes. We backfilled budget holes from the last legislative session, but we failed to make the responsible investments in our economy that would have helped our restaurants and small businesses right now and prevented the same holes in next year’s budget.

It’s true that having a healthy Rainy Day fund balance is one factor in improving the Commonwealth’s bond rating and overall fiscal position. But other measures of our economy are equally important, including the state of our public school system, the outlook for our future tax revenues, and the capacity to meet the human services needs of our most vulnerable citizens.

We could have put 1/3 of our available ARP funds toward education and human services, 1/3 toward responsible investments in tourism and business development, and 1/3 (still billions of dollars) toward the Rainy Day fund, improving both our current situation and our future prospects.

Missed budget opportunites

Investments in education:
Supporters of the budget have touted its substantial increase in public school funding, yet 60% of Pennsylvania’s public school districts are set to raise property taxes this year to cover their rising costs. Investing the full $1.3 billion Governor Wolf requested for our schools would have allowed us to move away from our over-reliance on property taxes and fully fund and implement the Fair Funding Formula, an important step toward closing the gap between wealthy and poor districts in our state.

Working to alleviate the property tax burden doesn’t just help seniors and working families; it also helps build stronger communities and a stronger economy by protecting home values and ensuring that every ZIP code has a “good” public school. At a time when Pennsylvania is about to lose a Congressional seat because we can’t keep young families here, there is no better return on investment than educating our next generation.
Investments in human services:
In Pennsylvania, individuals with physical disabilities or intellectual disabilities and autism may use the home and community-based services (HCBS) waiver system to cover their necessary support and care. This includes both care services and accessible housing and employment opportunities, granting people the opportunity to live more independently.

The HCBS system has been in a chronic state of underfunding and crisis for years, with more than 12,000 people on the HCBS waitlist and more than 5,000 of those in the “emergency” category, meaning they need services immediately, or in no later than six months. Realistically, we would need three years to phase in everyone waiting for services, with total costs reaching $1.2 billion, including $588 million in state funding, in the third year. This year’s budget was an opportunity to fund waiver expansions for the coming fiscal year and make the necessary investments in our economy to ensure that our future tax revenues continue to support these programs.
Investments in our care workforce:
Pennsylvania continues to face both an extreme shortage of and a growing need for care workers and direct support professionals (DSPs) to care for senior citizens and individuals with disabilities. There is only one home care worker for every eight Pennsylvanians in need of at-home care, and with our growing senior population comes an increased need for both home care and nursing home workers.

Care workers and DSPs often deal with varying, unpredictable hours and insufficient wages that often make it impossible for even full-time workers to make their own ends meet. As a result, 60% of home care workers leave the profession less than a year after starting the job and even more depart after two years. With low wages, lack of basic worker protections, and inadequate training, workers are pushed away from a profession we are in dire need of in Pennsylvania. Raising wages and reimbursement rates for care workers is an investment that goes directly back into our economy, as workers who make a living wage spend their income in Pennsylvania businesses and are able to end their reliance on state and federally funded programs such as SNAP benefits or LIHEAP.

Investments in Tourism, Hospitality, and Small Business:
We know that every $1 invested in tourism in Pennsylvania drives business to our local restaurants, hotels, and small main street businesses and returns $3.43 in tax revenues.

Imagine what could happen for our local business communities if we carried out our duty to use the American Rescue Plan COVID-relief funds to actually stimulate the economy and revive one of our most important—and most impacted—industries? Imagine the benefit to our small businesses if we both invested in relief and closed the tax loopholes that allow multi-state corporations to pay zero taxes to Pennsylvania while our local business owners shoulder one of the highest tax rates in the nation?

We had the opportunity with this budget to take a growth-mindset approach, using one-time funds to invest in the long-term success of our commonwealth. We had a moral obligation to prioritize the needs of Pennsylvania’s children, workers, families, and seniors and use American Rescue Plan money as it was intended: to rescue. Instead, we opted for austerity policy that sets us up to repeat the budget woes of prior legislative sessions. While I voted No on this year’s budget, I will continue to push for those currently unallocated and unaccounted-for ARP funds to be invested smartly and responsibly to help the citizens of Pennsylvania and bolster our economy.

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