October 14th, 2009 | 
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Pennsylvania finally has an approved budget, only 101 days late. But before anyone breathes a sigh of relief, there is yet another budgetary hiccup to deal with. Over the last few months, many county and local organizations have struggled to make ends meet because they were waiting on funding from the state. Places such as public schools, charter schools, parochial schools, day-care centers, social services providers, and veterans assistance programs are set to get their money first. In total, $2.6 billion in back payments will begin to be sent out today. While this is good news for some of these organizations, there is another problem that our state government seems to have overlooked. Many non-profit groups which were promised funding, were forced to take out hefty loans in order to keep their doors open. The Women’s Resource Center of Scranton owes $500 in interest on a $138,000 line of credit, and the Employment and Opportunity Training Center owes $1,600 in interest on a $200,000 line of credit. In fact, Tony Ross of the United Way of Pennsylvania puts the state’s total responsibility for interest payments somewhere between $5 million and $10 million. Ed Rendell is looking into ways of reimbursing these institutions. Once he has an accurate cost estimate, he then must “find revenues” to pay for it (I’m pretty sure that means some sort of tax, unless the Governor knows of a buried treasure somewhere).
I know that, in terms of the overall budget, $10 million isn’t that much money, but I am bothered by two things. (1.) Why do we keep promising funds to so many groups? It’s great to help others, but as our state struggles to make ends meet our leaders can’t continue to send massive amounts of money to non-profits. (2.) When I hear about the struggle to find a way to reimburse these organizations, I have to ask- Didn’t we just have an entire summer of budget hearings? How is that no one noticed a possible $10 million in interest payments? I can scarcely imagine what that figure will be once the official cost estimate is in, the legislature meets, and revenue is “found.” Good thing banks don’t continue to charge interest once you plan on paying them. Oh, wait. This is just another small example of the problem in Harrisburg. Lots of meetings, lots of press conferences, lots of debate, but in the end you spend four months waiting for an incomplete budget.
Posted in Politics | 
Tags: budget, budget hearings, Center, charter schools, day care centers, Ed Rendell, Harrisburg, interest, line, money, Pennsylvania, problem, social services providers, State, Tony Ross, United Way, veterans assistance
Great post, the money we have wasted in interest alone could have fixed several of the items these dim wits were hung up over while they could not get the budget done. Now the school districts want money from the state for interest, I’m sure someone else will be along to ask for the same. Even with this budget done, the projected shortfall for next year of only a couple billion here or there, is now only a little over 8 months away, who said we did not have anything to look forward too.
Great article Leslie! You make some great points and ask some interesting questions. I have more questions. When did Non-Profit organizations become taxpayer-funded? Aren’t they then, (at least partly) government organizations? How does this funding align with our state constitution?