Accelify Blog

Senate Postpones Key Vote on Medicaid, Education Funding (PA)

August 3, 2010

Even if the U.S. Senate passes a spending package for Medicaid and education funding this week to help lessen gaps in state budgets, it would be weeks before Pennsylvania’s state and local government employees know the impact of looming budget cuts.

Gov. Ed Rendell has been frantically waving a red flag for months, warning that without $850 million in funding for Medicaid, he’d have to eliminate thousands of public sector jobs.

He spoke with legislative leaders in a conference call on Monday during which both Democrats and Republicans agreed to see what the U.S. Senate does before they draw up any contingency plans.

Rendell’s spokesman, Gary Tuma, declined to talk about what steps could be taken, but did acknowledge that the administration’s budget office has drawn up several scenari os in response to the loss of any federal assistance.

Rendell and state lawmakers adopted a budget hinged on federal help despite warnings extra money from Washington might not materialize.

Tuma said Rendell planned to meet with legislative leaders on Wednesday, but has been pushed back till next week.

The Senate had planned a procedural vote to move forward on the bill Monday night, but Democrats delayed the vote until Wednesday because a budget scoring revealed it added an additional $5 billion to the deficit.

The aid package includes $16.1 billion for Medicaid reimbursements to states and $10 billion in education aid. Democrats, in an attempt to fend off Republican objections, aimed to offset the spending with other cuts.

If the Senate can’t get it passed, U.S. Sen. Bob Casey said the chamber would try again until it does.

"It’s likely we’ll have to keep going back to the drawing board and going back to a different way to pass it," Casey said. Republicans have held it up over concerns about federal spending amid high deficits.

But even if the Senate does get it passed before adjourning for its August recess, the House, which has already left, still needs to take up the bill when it returns in mid-September.

Casey said he’s been in constant contact with Rendell, whom he described as "very frustrated."

Rendell "knows what this means to the people of Pennsylvania and has been forced to develop contingency plans for possible cuts to services that people should have a right to expect," Casey said.

In a briefing with reporters after the call with Rendell, state Senate Majority Leader Dominic Pileggi said Pennsylvania will probably receive about 70 percent, or $595 million, of the $850 million in federal Medicaid assistance it was expecting.

"We’re still optimistic that we’ll get a substantial part of the $850 million," Pileggi said.

The administration has warned that as many as 20,000 state, county and school district employees could lose their jobs if Congress fails to approve that money.

Both Tuma and Pileggi declined to speculate on how many job losses might result from Monday’s vote. Rendell has been in discussion with the unions that represent state employees, Tuma said.

David Fillman, executive director of Council 13 of the American Federation of State, County and Municipal Employees, said he still doesn’t have a good handle on how many state employees might lose their jobs. The union represents thousands of state employees.

"They’re still crunching the numbers at the agencies," Fillman said. "I think, right now, they’re collectively holding their breath over there."

Tuma said 20,000 is a "ballpark" number and actual losses would vary depending on how school districts, county governments and the state choose to react to any lost federal cash — whether through programmatic cuts or job reductions.

One potential big-ticket cut for the state is the $250 million increase in the state subsidy for kindergarten through 12th-grade education, which was included in the $28.04 billion budget that was signed into law last month.

Jim Testerman, pres ident of the Pennsylvania State Education Association, said the bill could save 5,200 education jobs in the state.

"Right now what a lot of districts are doing is not filling positions through attrition. You’re going to see larger class sizes across the state," Testerman said. "If the governor and Legislature have to go back into the budget, you’re going to see marked layoffs across the commonwealth."

Pileggi said he expects the Rendell administration will present lawmakers a list of proposed reductions that the Legislature would then "react" to. It was not clear how much would require legislative approval.

Bob Caton, a spokesman for House Speaker Keith McCall, D-Carbon, said Democrats are taking a wait-and-see approach.

"We’re optimistic that the Senate is going to do the right thing," Caton said, "especially considering that so many states are in Pennsylvania’s situation right now."