Connect with us

Pennsylvania

Pennsylvania is flush with surplus cash, but it still faces a looming budget problem

Published

on

Pennsylvania is flush with surplus cash, but it still faces a looming budget problem


This story originally appeared on Spotlight PA.

Gov. Josh Shapiro wants to spend $3.5 billion of Pennsylvania’s surplus to stabilize transit systems, fund a court-mandated K-12 education overhaul, and expand the state’s economic development programs as part of his second budget proposal.

The state can afford such an expense. It has built up roughly $14 billion in financial reserves over the past four years, thanks to stimulus dollars and strong tax returns.

But if Pennsylvania had to rely solely on the tax revenue the Shapiro administration projects to bring in over the next few years, it wouldn’t be able to cover the tab.

Advertisement

That’s because Pennsylvania has a structural deficit. The state’s annual costs, such as paying public servants and providing health care to people who can’t afford it, consistently exceed the state’s annual tax revenue.

No government can avoid tax revenues periodically dipping, analysts noted. But long-term budget challenges like Pennsylvania’s can hollow out public services and burden local governments with covering unmet costs.

“Even without new initiatives, you have rising costs,” said William Glasgall, senior director of public finance at Volcker Alliance, a good-government group. “And if the projection of revenues does not match that, you have a structural deficit.”

Unlike the federal government, Pennsylvania cannot go into debt to cover its annual operating expenses. The state constitution prohibits the commonwealth from taking on debt except in a few specific scenarios, such as for disaster relief.

That essentially leaves lawmakers with two choices: spend less or bring in more money.

Advertisement

Instead, Pennsylvania’s divided executive and legislative branches have employed a variety of techniques that experts say hide the real cost of government. That includes accounting gimmicks, delaying payments to state contractors, leaving job openings unfilled, or flat funding key programs to make the numbers work.

“If you’re serving a larger population with the same number of workers, or if you have costs that are going up and your budget stays flat, often that means that effectively public services have been reduced,” said Josh Goodman, a fiscal health researcher with the Pew Charitable Trusts.

When the state punts on funding increases for education and other services, those costs are passed to counties, school districts, and nonprofits that rely on state dollars, Glasgall said.

Pennsylvania’s failure to meaningfully deal with its structural deficit may also have serious consequences if it needs to borrow money. Glasgall said lenders would “catch on” and see the state as a bad fiscal bet, and increase the cost to borrow.

As lawmakers begin negotiating this year’s budget deal in earnest, few are talking about the tax hikes or spending cuts that would be necessary to permanently bring the commonwealth’s finances in order.

Advertisement

And while the state has extra money available now, those dollars could quickly disappear if Pennsylvania continues spending at its current rate.

Pennsylvania’s primary revenue sources are broad-based taxes on sales and income for individuals and businesses, but so far Shapiro hasn’t proposed increasing these. In fact, he’s argued that Pennsylvania should more quickly implement cuts to its corporate net income tax.

Shapiro has avoided talking about the structural deficit while pitching his spending ideas, instead emphasizing the size of the state’s surplus and the need to invest it in communities.

“Look, it is not a badge of honor, nor is it something to be politically proud of for some lawmakers out there to say, ‘I took more money from the good people of Pennsylvania than I needed and then bragged about how I just kept it in some bank account here in the Capitol,’” Shapiro said in his budget address.

Republicans in the state legislature have pushed back, saying that the state should cut spending rather than tap its savings. They also argue that sitting on money is fiscally prudent.

Advertisement

State Senate Appropriations Chair Scott Martin (R., Lancaster) noted that Pennsylvania earns interest on its surplus and that spending it down would decrease returns. He added that spending surplus funds would not be a sustainable solution to the state’s structural deficit.

“We’re going to be in big trouble if we think that we can spend this entire surplus,” Martin told Spotlight PA. “We would just create a much bigger hole.”

How did we get here?

The commonwealth’s surplus is split between its rainy day fund, which is essentially a long-term savings account that requires a two-thirds vote of the legislature to tap, and its general fund. The latter is effectively its main checking account and accrues most state tax revenue.

Experts have said that states should keep about 12% to 15% of their total annual costs in a rainy day fund; this year, the target would be about $7 billion in Pennsylvania. But just five years ago, it contained only $22 million — enough to run the state government for just a few hours.

The fund was depleted during the Great Recession under Democratic Gov. Ed Rendell. After federal stimulus dollars ran out, lawmakers struggled during Republican Gov. Tom Corbett’s four years in office and Democrat Tom Wolf’s first term to balance the budget.

Advertisement

Corbett, who had pledged not to raise taxes, largely tried to deal with the financial situation by supporting spending cuts.

The enacted cuts included a 10% reduction in funding for county human services, and, most significantly, a $1 billion reduction in funding for education. Corbett and his allies argued the latter was necessary because the Rendell administration had used stimulus money to prop up the budget. Regardless, the strategy made Corbett unpopular and he lost his reelection bid to Wolf.

New taxes or increases to existing ones have played a small role in solving recent budget woes. Wolf proposed increasing the state’s flat income tax rate and taxing natural gas drillers by the volume of gas extracted, but the then-GOP-controlled legislature didn’t bite.

Instead, Wolf and the legislature balanced the books and raised one-time revenue through a mix of temporary solutions, like issuing new casino licenses and borrowing against the state’s share of tobacco settlement revenue.

The state has also delayed payments or purposefully undercounted projected Medicaid expenses to appear to balance annual budgets.

Advertisement

In 2017, for instance, Republicans agreed to a budget that was underfunded by hundreds of millions of dollars, and gave Wolf the authority to fill the gap by drawing money from the state’s special funds for things like transportation.

Wolf, who opposed that approach, instead borrowed money from a venture capital company against the Pennsylvania Farm Show Complex in Harrisburg, leaving the state on the hook to pay back $191 million in interest for decades to come.



Source link

Pennsylvania

These new 2026 health care laws are taking effect in Pa., N.J. and Del.

Published

on

These new 2026 health care laws are taking effect in Pa., N.J. and Del.


From Philly and the Pa. suburbs to South Jersey and Delaware, what would you like WHYY News to cover? Let us know!

This past year, lawmakers in the Delaware Valley pursued changes to health care policies and regulations that will expand access to prescription drug savings, ensure coverage for breast cancer imaging, reaffirm lead testing requirements, increase breastfeeding support in prisons and more.

Here are some new health care laws coming to Pennsylvania, New Jersey and Delaware that will be in place or take effect in 2026.

Pennsylvania

Medicaid coverage for weight loss medication

The Pennsylvania state budget increases funding in several areas, but will cut costs by limiting coverage for glucagon-like peptide-1 drugs such as Wegovy and Zepbound for people in the Medicaid insurance program beginning Jan. 1.

Advertisement

The state’s Medicaid program, called Medical Assistance, will no longer cover GLP-1 drugs solely for obesity and weight loss, but will continue to do so for people with diabetes and other health conditions.

Pennsylvania started paying for GLP-1 drugs for obesity in 2023. But the cost to the state rose as an increasing number of enrollees obtained prescriptions.

The commonwealth spent $650 million for GLP-1 drugs in Medicaid, for all reasons, in 2024, according to state officials. Lawmakers estimate it would soon cost over $1 billion annually.

Naloxone distribution by emergency responders

Emergency responders like emergency medical service workers can leave packages of naloxone, an opioid overdose reversal medication, with families and caregivers at the site of a 911 call or other treatment response.

The law codifies an executive order signed by former Gov. Tom Wolfe in 2018, which established a standing order allowing emergency responders to not only use naloxone to reverse an overdose, but to leave additional doses with others at the scene.

Advertisement

However, executive orders are temporary and can expire or be reversed by a sitting governor. The new law now makes this policy permanent and strengthens protections for EMS workers.

The legislation also increases transparency in prescription prices and costs. When asked by a customer, pharmacists must disclose the current retail price for band name and generic versions of any medication being picked up.

They also must help customers and patients figure out their out-of-pocket costs for brand-name and generic options.

All parts of the law will be in effect by July 2026.

Prescription savings programs for seniors

Seniors who save money on their prescriptions through state assistance programs will get to stay in those programs even if their annual incomes go over the eligibility limits because of a bump in their Social Security payments.

Advertisement

A law passed this year ensures that Social Security cost-of-living adjustments will not disqualify someone from participating in the Pharmaceutical Assistance Contract for the Elderly and the Pharmaceutical Assistance Contract for the Elderly Needs Enhancement Tier program.

The moratorium on Social Security cost-of-living adjustment income increases will last from Jan. 1 through Dec. 31, 2027.

“The PACE and PACENET programs play an important role in supporting older adults and offering tremendous savings by helping them pay for their prescription medications,” Pennsylvania Secretary of Aging Jason Kavulich said in a statement. “This new law will allow older Pennsylvanians to remain eligible for this benefit which provides them with lifesaving medication and a cost savings to their fixed incomes.”

Diagnostic mammogram and breast cancer imaging

A new law requires insurers to cover follow-up testing for women who need additional imaging after an abnormal mammogram, including an MRI or ultrasound.

While annual mammograms are fully covered by insurance, additional diagnostic testing can come with high costs, which cancer activists say can delay an early diagnosis of breast cancer.

Advertisement

The expanded coverage will apply to insurance plans and policies that are issued or renewed starting summer 2026.

“With early detection and diagnostic imaging, we have the tools to limit the harm caused by cancer and the suffering it brings to families across the Commonwealth,” Donna Greco, Pennsylvania government relations director for the American Cancer Society Cancer Action Network, said in a statement.



Source link

Continue Reading

Pennsylvania

Pennsylvania couple accused of living with dead relative for months to cash his Social Security checks

Published

on

Pennsylvania couple accused of living with dead relative for months to cash his Social Security checks


A Pennsylvania couple is accused of living with their dead relative for months to reap the benefits of his Social Security checks. 

The Greene Washington Regional Police Department said James and Debbie Bebout of Canton Township were arrested in the death of James Bebout’s brother, Michael Bebout. 

Police paperwork details allegations

According to police paperwork, authorities received a call on Jan. 16 from James Bebout, who said he went to serve his brother breakfast when he found him “stiff as a board.” When officers arrived at the home on Hayes Avenue for a welfare check, DeForte said several red flags were raised.

“Instead of finding the decedent that would have passed away within the last 24 hours, we found the decedent in a state of severe decomposition,” DeForte said.

Advertisement

DeForte said an investigation revealed Michael Bebout had been dead for about six months.

“You have two defendants that we believe knew the decedent had passed that were more interested in reaping the benefits of a governmental check and access to a warm home than they were providing some type of moral and ethical solution to their relative passing,” DeForte said.

During an interview with Debbie Bebout, investigators said she allegedly admitted to knowing Michael Bebout had been dead since around October but did not contact anybody.

“Debbie stated she cashed several of Michael’s $1,200/month Social Security checks in order to pay for food. Debbie stated she was concerned about getting kicked out of the house if Michael was known to have died,” police paperwork stated.

“What we found throughout the investigation was roughly a half a dozen Social Security checks that were cashed by the defendants,” DeForte said.

Advertisement

During an interview with police, Debbie Bebout later admitted to officers that she “actually noticed that her brother-in-law, Michael Bebout, dead around Labor Day 2024.”

She also allegedly told officers that she pretended to take care of Michael Bebout every day so her husband would not find out.

Neighbors say it smelled “awful” outside the home

“We believe, through our investigation, that both defendants were well aware that the decedent was decomposing in the house with them. The smell was so pungent that you could smell it outside of the home prior to entry,” DeForte.

Neighbors described the couple as “bad news” and said that they knew something was wrong when it began to smell outside.

“We smelled an awful smell. We called the gas company, thinking it was a gas leak. Here, it wasn’t a gas leak. It was him. They always had a window cracked, to let the smell out, apparently,” Samuel Burgess said.

Advertisement

Burgess said he was friends with Michael Bebout and knew he had been sick before his death.

“He was a sweetheart. He would do anything for anyone. He would give you his last dollar, his shoes, his shirt, anything. He was a perfect gentleman,” Burgess said.

Dead animals found inside home

Burgess said Michael Bebout had a dog that he loved that also lived in the home.

“There was a little dog. I don’t know what happened to the little dog. He might be in there dead also, yeah, because Michael had a little black puppy dog,” Burgess said.

DeForte said that several dead animals were found inside the home.

Advertisement

“When we conducted the welfare check, we had noticed dead animals that were also severely decomposed throughout the house, that would also have been accompanied by a lot of garbage. A lot of clutter,” DeForte said.

“To have something like this happen in society today is an absolute violation of the human construct. This is both morally and ethically reprehensible,” DeForte said. “In over three decades of my law enforcement career, I have never witnessed something as macabre as what we saw inside of that residence.”



Source link

Continue Reading

Pennsylvania

Police officer rescues 8 people from inside burning duplex in Bucks County, officials say

Published

on

Police officer rescues 8 people from inside burning duplex in Bucks County, officials say


Thursday, December 11, 2025 1:21PM

Fire crews battling blaze at duplex in Penndel, Bucks County

Firefighters in Bucks County battled a fire inside a duplex Penndel, Pennsylvania, on Thursday morning.

PENNDEL, Pa. (WPVI) — A police officer’s quick actions helped save eight people from inside a burning duplex in Bucks County.

The fire broke out at 4:40 a.m. Thursday on the unit block of West Woodland Drive in Penndel Borough.

Officials say Officer Sean Peck observed the active fire and immediately jumped into action.

Advertisement

Officer Peck ran into the home, which was filled with fire and heavy smoke, and rescued eight people from inside.

Fire crews that were called to the scene reported heavy hoarding conditions inside, making it difficult to enter the property.

There are no reports of any injuries.

The cause of the fire remains under investigation.

Copyright © 2025 WPVI-TV. All Rights Reserved.

Advertisement



Source link

Continue Reading

Trending