UPDATE: In 2010-2011 state budget, legislators chose big tobacco over Pennsylvania families.

For the first time in nearly eight years, Pennsylvania’s General Assembly passed an on-time state budget. Unfortunately, the budget contained nearly $1 billion in cuts to services that help Pennsylvania’s most vulnerable residents, including literacy centers, child welfare programs and homeless services. The budget cuts also require 1,000 state employee layoffs, with more job losses likely to follow as the effects of those cuts ripple through the public and private sectors.

A cut to one essential service—childcare or medical services—creates a ripple effect on the rest of Pennsylvania’s social safety net. And when families can’t make ends meet, food and nutrition are usually among the first sacrifices they make, increasing rates of hunger in our communities.

Why the Budget Failed

To balance this year’s budget, legislators relied primarily on cuts to vital services rather than new measures that would raise revenue. Those measures that legislators failed to pass include such commonsense proposals as:

• Taxing smokeless tobacco products and cigars: Pennsylvania is the only state in the nation that does not impose an excise tax on smokeless tobacco. It’s one of only two states that do not tax cigars.
• Closing corporate tax loopholes: Thanks to corporate tax loopholes, 84% of corporations doing business in Pennsylvania pay less than $1,000 in net income taxes every year. That’s less than a family that earns $36,000. Closing those loopholes would have required large, multistate corporations to pay their fair share of taxes on income earned in Pennsylvania.
• Eliminating the sales tax vendor discount: This antiquated tax break allows companies that pay their taxes on time to keep 1% of their sales tax—a windfall for large corporations, such as Wal-Mart and Best Buy. Eliminating this sales tax vendor discount would have added a much-needed $74 million to state coffers.

Lawmakers did impose a severance tax on natural gas drilling in the Marcellus Shale as of Jan. 1, but the budget does not include revenue from that tax.  

In addition, the budget also assumes $850 million in federal Medicaid funding (FMAP) that is now in jeopardy on Capitol Hill. If Congress fails to approve all of those funds, Pennsylvania will have to find additional cuts to the budgets.

How You Can Still Help

The budget may be signed into law, but Pennsylvania’s budget is not finished. It’s critical that Congress passes the FMAP funding to prevent additional cuts to vital services. Many members of Congress are more concerned with solving the long-term deficit than meeting immediate need for jobs and economic recovery throughout the country. If FMAP does not pass, it’s likely that the biggest hits would be absorbed by the Department of Education and the Department of Public Welfare, which approves public benefits, such as SNAP (food stamps), for people in need.  

Tell your Congressional representatives to extend FMAP funding now.

Learn More:

• Sign up for advocacy newsletter for the latest updates
• Southeastern Pennsylvania (SEPA) Budget Coalition, a coalition of more than 100 essential service agencies, including the Coalition Against Hunger