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In pre-COVID-19 days, the coming of September meant schools settling into their classroom routines, county fairs, packed stands for football games, and a light legislative agenda in election years.
Everything is different in 2020, however, including the legislative agenda in the Pennsylvania General Assembly. Believe it or not, we’re rapidly approaching state budget season again.
In case you forgot, the General Assembly passed a five-month stopgap budget in May. The dramatic drop in state revenues during the COVID-19 crisis, particularly with the extension of the deadline for the filing of state income taxes, made passing a full 2020-21 fiscal year budget by June 30 impossible because of the uncertainty surrounding state revenues.
Thus, most state programs were flat-funded for five months, with the knowledge that the General Assembly and the Administration would decide on a budget for the remaining seven months of the year later in 2020.
A fall debate on the commonwealth’s budget is going to be painful for everyone in Pennsylvania. Relations between the Administration and the Republican majority in the General Assembly are frayed, making negotiations difficult.
The budget debate will happen in the aftermath of the election, as it is unlikely a new budget will be approved before November 3. And it will take place with the reality of unprecedented declines in revenues. This situation can mean only two things – either increasing revenues or making big cuts in spending.
Potential cuts would be widespread and painful for Pennsylvanians of all ages, but older Pennsylvanians may be particularly targeted.
Medicaid is one of the largest single-ticket spending items in the state budget and a significant driver of those costs is long-term care. The elderly are the largest consumers of long-term care services with Medicaid paying for those who have exhausted their assets.
The commonwealth hopes for federal assistance to address some of the funding challenges for long-term care brought on by the COVID-19 crisis, but federal dollars will not balance the Medicaid long-term care budget. The biggest losers in this scenario are non-Medicaid-eligible consumers of these services, who will experience huge cost increases as Medicaid reimbursements remain flat.
These higher costs mean families may delay getting needed long-term care services, resulting in individuals entering the system in poorer health and in need of a higher level of care.
Increased private-pay costs will also result in those receiving care spending down their assets quicker and becoming eligible for Medicaid assistance – but they will be in poorer health and need higher cost services. It’s a recipe that results in everyone losing in the long run.
Looming spending cuts won’t be restricted to Medicaid. Energy assistance programs helping families of all ages with their utility bills will be threatened. Assistance to schools training health care workers could be limited. Transportation programs for those needing assistance to get to doctor’s appointments or the grocery store may suffer.
Is there an alternative that can protect these programs for the present and the future? There is, but it will require increased revenues. In other words, higher taxes.
A post-election debate might be expected to give elected officials the political courage to look to the future and take the action to adequately fund state services. But courage is in short supply in the General Assembly, and it is hard to imagine the Republican majority taking the necessary action.
As the old saying goes, desperate times call for desperate measures. Knowing the chances of getting a general revenue increase through this General Assembly are slim to none, the Wolf administration has proposed an “alternative” revenue-enhancing plan – the legalization of recreational marijuana.
Pro-and-anti-marijuana arguments are many, but in a time of fiscal crisis, there is a distinct lack of other ideas to address the coming revenue shortfall.
Republicans who control the House and Senate oppose the legalization of marijuana. They may talk about their opposition because of an anti-drug platform, but is there an ulterior motive? Could opponents of government spending actually be resisting a way to bring more revenue to the Commonwealth in order to use the fiscal crisis created by a pandemic to advance the idea of drastically reducing state assistance to the most vulnerable in society?
The answers to these questions should be revealed in what will be a tumultuous few months in Pennsylvania politics. Everyone interested in the outcome of the debate about the Pennsylvania budget should make sure their seat belts are fastened tightly, because this is going to be an extraordinarily bumpy ride.
Opinion contributor Ray E. Landis writes about this issues that are important to older Pennsylvanians. His work appears biweekly on the Capital-Star’s Commentary Page. Follow him on Twitter @RELandis.
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