The Senate today (November 20) gave final approval to a supplemental spending bill — completing the state budget for Fiscal Year 2020-21 — and sent the measure to the Governor’s desk, according to Senator Dan Laughlin.
Passage of Senate Bill 1350 finalizes the state spending plan for the current fiscal year (July 1, 2020 to June 30, 2021) that was initiated with the enactment of a five-month interim budget (Act 1A – House Bill 2387) on May 29.
Overcoming the severe impact of the COVID-19 pandemic on Pennsylvania’s economy, the final $35.5 billion FY 2020-21 budget is balanced without the need for tax or fee increases or debt using a combination of current state revenues and resources and federal stimulus funding.
“The bottom line is that this budget maintains state services and programs and supports our local school districts without a tax increase or borrowing,” Senator Laughlin said. “That is a major accomplishment considering the impact that the pandemic had on our region, our state and our nation. On the upside, financial experts are predicting a better year for the state than what was anticipated in May. That helped to make this budget easier, but we are not out of the danger zone by any means. We must remain vigilant and prudent.”
While the interim spending plan approved in May provided five months of funding for most state services and programs, it made a full-year financial commitment for education at all levels and for a variety of food security programs. Funding for basic education, special education, early education and higher education is maintained in the final spending plan at the same level as Fiscal Year 2019-20.
Spending in the final Fiscal Year 2020-21 state budget includes General Fund appropriations of $32.1 billion and an additional $3.4 billion in federal stimulus funds ($2.1 billion Federal Medical Assistance Percentage (FMAP) and $1.3 billion federal CARES funds).
After adjusting for supplemental spending that should have been in FY 2019-20, overall state spending in the final FY 2020-21 budget — including federal stimulus funds — is down more than $760 million (2.1 percent) from FY 2019-20.
The final budget includes $200 million to provide school property tax relief to replace the revenues those districts lost by the closure of Pennsylvania’s casinos during the pandemic shutdown, a move pushed by Senator Laughlin.
“The hit on state tax revenues by the pandemic was just one part of the picture. There was another aspect that could have slammed property owners in Erie and across the Commonwealth. The closure of gaming facilities — like Presque Isle Downs & Casino – across the state meant Pennsylvania was facing the loss of about half of the revenue that normally would be available to allow school districts to provide homestead exemption tax relief for homeowners,” said Senator Laughlin. “That could have resulted in significant tax increases for some homeowners here in Erie County.”
Contact: Matt Azeles