Wednesday, September 23, 2009

9/23/09 - Liability and Health News update - Mcare Fund to be absorbed into state budget

9/23/09 - Liability and Health News Update
It's a "Deal:" Mcare Fund to be absorbed into PA budget
by Donna Baver Rovito, Editor, "Liability Update/Health Care Focus"
Author, "Pennsylvania's Disappearing Doctors"

This Liability and Health News Update newsletter is a free service which I provide, as a volunteer, to help supply medical liability reform and other health care news and information, legislative updates, and political insight to physicians, patients, liability reform and quality health care advocates. NO ONE pays me to do this.

I am not employed by any physician or health care reform advocacy or liability reform organization, political party or candidate, although I volunteer for several. I am a quality health care, physician and patient advocate, breast cancer survivor, physician's spouse, journalist, political noisemaker, mom, and freelance writer. I am not, nor will I ever claim to be, unbiased, unlike many in the mainstream media.

Most information in this newsletter is copied and pasted from other sources, and will always be identified with links. Opinions and clarifications are my own, and do not reflect the official position of any physician or patient advocacy organization or tort reform or health care reform group unless stated as such. My opinions are placed in double parentheses ((xxxxxx)), italicized and appear in blue.

This Update is emailed to health professionals, physician and patient advocates, and others interested in ensuring access to quality medical care. It also appears on the following BLOG (when I remember to post it):




GOP affirms vow to reject budget reached by leaders

Taxes and Revenue in Pennsylvania Budget Deal

Governor Rendell’s Medical Malpractice Abatement Funding PlanGoal: Ensuring access to quality healthcare for all Pennsylvanians.

John Baer: Send in the sheep, put the lawmakers out to pasture

Analysis of Proposed 2009-10 Pennsylvania State Budget

Release from PA State Rep Doug ReichleySeptember 21, 2009 Reichley Critical of Budget Deal Between Governor and Legislative Caucuses

Panella outpacing Melvin in top-court fund-raising

Excerpts from a letter from Philadelphia area physician, Albert El-Roeiy M.D., MBA, about Judge Joan Orie Melvin, Candidate for PA Supreme Court

From Judge Joan Orie Melvin's website


Although three of four caucuses have made a "deal" on a state budget, it isn't yet a "done deal." (The House Republicans are the holdout.) Rank and file members of both houses don't have the details yet, and weren't involved in the "dealmaking."

Part of the proposed budget deal absorbs the Mcare Fund and redirects its funding sources to help balance the state budget, according to media reports. Those reports have been a little vague about how this aspect of the budget deal will work, so I've done a little bit of research on my own to help clarify. If there are any mistaken conclusions here, they're all mine....

Remember how we all hoped that the surplus in the Mcare Fund would be used to fund its $2 billion plus unfunded liability, allowing the state to retire this mandatory state-run medical liability insurance fund WITHOUT adding to the burden of future PA doctors who haven't even started medical school yet? (Not to mention those who already can't afford their freakishly high malpractice premiums?)

Well, strike that. The current deal, according to the Commonwealth Foundation, absorbs pretty much every cent of the existing surplus in the fund - all $700+ million of it - and redistributes two dedicated sources of Mcare Fund income, the PA Auto CAT fund (established in Act 13), and the $.25 cigarette tax passed in 2003 to create the Mcare abatement program (which died with a whimper in 2008) into the general fund to balance the budget.

The "deal" on the table doesn't take just some of it, as PA physicians had feared and fought and asked their legislators not to do, it takes ALL of it, as well as future revenues generated by taxes previously dedicated to funding Mcare. Of course, some would argue that the legislature has the absolute right to redistribute tax-generated funds as it sees fit if the initially intended useage is perceived to be no longer necessary.

But not everyone agrees about whether it's necessary or not. PA's medical liability premiums are still among the highest in the nation - while PA physician reimbursements are among the lowest in the nation. Is it any wonder only about 15-20% of residents trained in PA stay here after their training is complete? That's down from 50%, only a decade ago.

I've said it before and I'm sure I'll say it again - there's not a single good FINANCIAL reason for a doctor to practice in Pennsylvania. Fortunately for the patients of Pennsylvania, our doctors do what they do for lots of other reasons. Eventually, though, it will catch up with us....

Here's the longterm problem, as I see it:

Eventually the bills will have to be paid on the cases that aren't filed yet or haven't yet reached a conclusion - which, as many of you know, can take 5-10 years. Even though the proportion of commercial insurance to Mcare funding in awards and settlements has gone down (based on reforms passed in 1996), there will still be awards that exceed commercial insurance levels, and for which the Mcare Fund will be responsible.

Estimates of a $2 billion unfunded liability might be a little high, but whether they are or not, since Mcare isn't a real insurance company with reserves, but rather a pay-as-you-go fund, SOMEONE is going to have to pony up the money as the fund pays it out.

And with the surplus and future tax-based funding sources gone, it's reasonable to assume that those payments will fall on Pennsylvania's physicians and hospitals - which are ALREADY struggling with high malpractice premiums and low reimbursements.

With the abatement gone, PA physicians must once again pay their full Mcare surcharge - and when the outstanding cases reach their conclusions and the awards are tallied up, many fear the state will just divide the total by the number of PA physicians and send out a higher bill.

The really sad part is that many of those bills will land on the desks of physicians who weren't even PA physicians when the suits were generated or filed. If the entire burden of covering future Mcare payouts will fall on PA's doctors and hospitals, why would any young physician EVER agree to practice here? Altruism is wonderful - but even doctors have to pay their light bills and student loans.

It's not like PA's doctors aren't already encountering recruitment problems - and even when our hospitals step up to the plate to hire larger numbers of physicians to meet increasing needs, eventually the finances catch up with them, too. That's part of the reason there are so few hospitals delivering babies in major metropolitan areas like Philadelphia - high malpractice premiums for their employed ob/gyns coupled with low remibursements caught up with them.

Health care isn't just about coverage - it's about access to care, and without a steady crop of new young doctors, the outstanding care Pennsylvanians have always been able to rely upon could slowly disappear as our physicians age and retire. Adding to Pennsylvania's already burdensome climate for physicians is exactly the wrong thing to do right now.

It's unfortunate that what legislators perceive as a partial cure for the state's current budget woes could create an even more difficult problem later on, limiting Pennsylvanianns' access to quality doctors and placing an even greater burden on the doctors who've elected, for the most altruistic of reasons, to practice medicine here in PA despite the fact that there isn't a single good financial reason to do so.

Further down, you'll find some information about my FAVORITE statewide judicial candidate - Judge Joan Orie Melvin, who has many years of judicial experience on the Superior Court, a deep understanding of the trials and tribulations of the medical profession (she's both the daughter and sister of physicians), the support of many of PA's physicians and health care providers and an abiding respect for the PA Constitution. She's also a really, REALLY nice person.....

I've included excerpts from a letter of support written by a SE PA ob/gyn doc and some pages from Judge Orie Melvin's campaign website. Please consider supporting her for Pennsylvania Supreme Court, with a financial contribution now and your vote in November. Thank you!



GOP affirms vow to reject budget reached by leaders
By Brad Bumsted

Tuesday, September 22, 2009 HARRISBURG -- A state budget agreement between legislative leaders and the governor is far from a done deal in the House, where Republicans are vowing to fight it and some Democrats are wary of tax increase proposals.

"I'm going to vote no," said House Minority Whip Mike Turzai, R-Bradford Woods. "The vast majority of my colleagues are going to vote no. We'll see if (Democrats) have the votes." House Republicans weren't party to the agreement and many view it as "business as usual," Turzai said.

The $27.9 billion agreement includes a 20 percent tax on the profits of small games of chance; lifts the sales tax exemption on theater, dance and musical performance admissions; and raises the tax on cigarettes by 25 cents per pack.

A House-Senate conference committee likely will approve the bill as early as Wednesday, and then both chambers must approve it. Pennsylvania is in the 84th day today without a budget.

Some Western Pennsylvania Democrats are wary of taxing volunteer fire companies, Veterans of Foreign Wars and American Legion halls on profits from punch boards, pull-tabs and raffles.

Rep. Joseph Petrarca, D-Vandergrift, said there are "many troubling issues" including small games of chance and he believes details of the budget agreement will show that "Western Pennsylvania is getting the short end of the stick." He said it's "ridiculous" that rank-and-file members haven't been given details.

"I worry about small arts organizations, small theater companies in particular. If they are having to charge tax on tickets for their theatergoers, that's a big strain on them," said Bill Bodine, director of The Frick Art & Historical Center and board chair of Greater Pittsburgh Arts Council. "I'm hopeful that everyone comes through this intact, but any strain that's added on to arts organizations in a time when they're already suffering in an economic downturn can't be a good thing."

The small games of chance tax "is a Republican Trojan horse designed to regain the majority" in the House, said Rep. David Levdansky, D-Elizabeth. Democrats control the chamber.

Fire companies and social clubs are reeling from the opening of casinos and the statewide smoking ban, Levdansky said. They soon could face more competition if table games are legalized -- another proposal in the budget, he said.

"So what are we going to do? We're going to tax small games of chance because we wouldn't tax the oil and gas industry," he said. A proposal to tax the extraction of natural gas on the Marcellus Shale reserve failed to garner sufficient support.

But Rep. Anthony DeLuca, D-Penn Hills, said he intends to vote for the bill, because "we can't afford to let this budget impasse drag on."

"You blow it up, and next thing you know you're into early next year" without a budget, DeLuca said.

Asked whether House Democrats can pass the budget without GOP support, Majority Leader Todd Eachus of Luzerne County said Friday: "We're going to continue to work at it. I'm hopeful we can continue to make Republicans understand the value of this plan." A selling point is that it's a conservative spending plan that proposes $300 million less than last year, Eachus said.

But Turzai said House Republicans want a budget that spends far less and doesn't raise taxes, like the amendment they proposed this summer that Democratic leaders wouldn't submit for a vote.


From the Commonwealth Foundation
SEPTEMBER 19, 2009
Taxes and Revenue in Pennsylvania Budget Deal
((This is the most comprehensive breakdown about the use of Mcare funds I could find...I've highlighted them in red....))

Gov. Rendell and legislative leaders from three caucuses (House Republicans were not involved) announced a deal on the Pennsylvania state budget. Via PLS and Capitolwire (subscription), here are some of the details.
Spend total: $27.945 billion (this does not include paying off deficit from last fiscal year, which ended about $1.7 billion in the red).

Tax Increases ($821 million):

Retroactively increasing and delaying the phase-out of the Capital Stock & Franchise Tax. This is a tax Gov. Rendell said was the most harmful to Pennsylvania's economy. It is estimated to add $374 million in 2009-10 and $550.6 million to state revenue collections.
Expansion of the sales tax to tax admission to concerts, museums, theaters, etc. Estimated to collect $100 million in tax revenue.
Legalizing and taxing table games in casinos. Estimated (based entirely on conjecture, given the failure of slots to raise what was projected) to generate $200 million, between both the tax and license fees.
A 25 cents per pack increase in Pennsylvania's cigarette tax - a tax which disproportionately affect the poor, is a declining revenue source, and leads to smuggling (and will add on to the recent federal cigarette tax increase). This is to be estimated a $97 million tax increase this year and $146 million next year.
Applying cigarette tax to small cigars: $30 million estimate
Tax on small games of chance (e.g. Bingo): $20 million estimate
Tax Cuts ($74 million):

Reforms to the Corporate Net Income Tax - increasing the sales factor in calculating the tax, and increasing Net Operating Loss carryforward limits - estimated to be a net reduction of $74 million.

Additional Revenue Sources ($335 million):

Expanding leases for natural gas drilling in the Marcellus Shale formation, estimated $65 million in additional revenue, in addition to $143 million from current leases.
Redirect of cigarette tax in HCRPA to General Fund: $171 million.
Redirect of motor license fees (probably those charged to MCare): $44 million.
Eliminating tobacco cessation spending: $16 million.
Suspension of certain tax credits: $39 million. It seems as though Gov. Rendell has preserved his precious film tax credit.
One-Time Revenue Sources ($2.14 billion):
Rainy Day Fund: $755 million (exhausting the fund)
Health Care Provider Retention Account: $708 million (draining the fund)
Transfer of $100 million from "MCare Fund Supplemental" surplus. I'm not clear how this differs from HCPRA. ((My guess is that this is the money doctors and hospitals paid directly into the fund...))

Accelerating due date of sales tax: $211 million (in 2010-11, acceleration of Personal Income Tax: $159 million). I'm not sure why acceleration this year won't result in less revenue in later years.
Transfer from Tobacco Endowment Fund: $150 million.
Tax amnesty for deliquent taxpayers: estmate of revenue increased to $190 million.
$25 million from liquor store profits.
Other budget transfers: $10 million.
Federal Stimulus Funds ($2.4 Billion)


((This is a little bit of historical perspective on the Mcare fund, and how it came to be - directly from the PA Office of Health Care Reform website, still available online yesterday.))

Governor Rendell’s Medical Malpractice Abatement Funding Plan
Goal: Ensuring access to quality healthcare for all Pennsylvanians.

Funding Plan:

Cigarette tax of $.25

An increase in the cigarette tax of $.25 effective immediately would generate approximately $100 million from December 2003 to June 30, 2004, and approximately $181 million each fiscal year thereafter.

The proposal would increase the cigarette tax from $1 a pack to $1.25. Current taxes in our border states are: New Jersey and New York, $1.50; Maryland, $1; and West Virginia, Ohio and Delaware, $.55.

Use of Auto CAT Funds
Preserve the transfer of funds in the amount of $44 million each fiscal year beginning January 2004 from the Auto CAT Fund to the Mcare Fund (as required in Act 13). Part of these funds will be used to offset the discounted rates for health care providers not receiving the abatement (required by Act 13) and the remainder will be applied to the physicians’ abatement under the Governor’s proposal. (Approximately $10 million of the $44 million would be needed to fund the discounts. The remaining $33 million would be applied to the $220 million cost of the Governor’s proposed abatement.)

Long-term Use of Dedicated Cigarette Tax Revenue
Unless and until a revenue funding source is committed to paying off the long-term “tail” obligation of the Mcare Fund, the only source of payment is the ongoing assessment of health care providers, even after they purchase their $1 million mandated coverage in the marketplace (2009).

The long-term “tail” pay down is an enhancement to the Governor’s June Proposal in response to the valid concerns of physicians, hospitals and legislators that this burden, even in a greatly improved insurance market in Pennsylvania, would be a deterrent to retaining and attracting physicians for years to come.

Use of Auto CAT transferred funds until 2014, plus cigarette tax revenue not needed to fund the three-year abatement through 2005 (or 2007 if the Insurance Commissioner deems necessary) will be applied to the payoff of the Mcare long-term “tail” ($2.3 billion).

Medicaid Matching Funds
The Administration fully intends to advance an initiative to draw down matching federal funds. If this initiative is acceptable to CMS (Centers for Medicaid and Medicare Services, Washington, DC), federal matching funds together with state funds (cigarette tax revenue) will be used to fund the abatement and to pay off the Mcare long-term “tail”. All excess cigarette tax revenue (state funds) will be applied immediately (as early as 2004) to accelerate the payoff of the long-term “tail” of the Mcare fund.


Philadelphia Daily News
Posted on Wed, Sep. 23, 2009
John Baer: Send in the sheep, put the lawmakers out to pasture By John Baer
Daily News Political Columnist

WE OUGHT to start sending sheep to the Legislature.

I know you think we already do, but I mean for real. Hear me out.

We save a ton of money even if we phase them in.

Most sheep don't drive so we save on taxpayer-financed car leases and mileage. They don't need golden-fleece health benefits or fat pensions; we just put them out to pasture.

We save a bundle on catered Capitol meals costing taxpayers nearly $250,000 during the last legislative session ($20,550 in one day), according to a recent report in the Pittsburgh Tribune-Review.

Heck, sheep can eat grass in Capitol Park and on highway medians around Harrisburg.

We save on the cost of lawmakers' per diems, $30,000 to $50,000 a day.

Sheep are easy to herd, rarely go on the lam and the influence of special interests would decline - I can think of only a few lobbyists who'd want to take sheep out.

And, really, is there is any better argument for reducing humans in our overlarge, overstaffed, underperforming Legislature than Gov. Ed's comments while announcing the state budget agreement last Friday?

The Guv withheld specifics because he didn't want rank-and-file members (that would be, oh, 247 of the 253 legislators) to learn the details in the media.

This, of course, is because just six "leaders" negotiated budget terms. Most lawmakers had virtually nothing to do with the deal. The vast majority actually learns details only from the media.

I can't tell you how many times during the 80-day budget impasse that a nonleadership lawmaker asked me what was going on.

Now, they're asked to line up like sheep and approve a budget in which they had little input. So why not just elect sheep?

"Not all of us are sheep," says Rep. Glen Grell, R-Cumberland County, a central Pennsylvania conservative elected in 2004.

But he concedes: "Rank-and-file members have not seen one piece of paper" on the deal. "The process has been horrible," Grell says, "If ever the rank-and-file was going to coalesce behind something, it's now, and it should be budget-process reform."

Rep. Scott Conklin, D-Centre County, elected in 2006, is so frustrated he's holding a public forum next month with the League of Women Voters, Common Cause, the Commonwealth Foundation and grassroots activist group Democracy Rising PA on ways to improve the process.

"Nobody wants to go through this," Conklin says. "We all look bad."

I know there are sheep up in Centre County, so I ask Conklin what he thinks of my idea. "I'm not going to answer that one," he says.

It isn't just relative newbies who are frustrated.

Veteran Rep. Gene DiGirolamo, R-Bucks County, says, "This is my 15th budget and it's been embarrassing professionally and personally."

He adds, "We ought to put something in place to get this done on time . . . what we got [in the pending deal] could have been done back at the end of June."

There are legislative proposals, none by leadership, forcing lawmakers to forfeit pay if a budget is late, allowing the prior year's budget to kick in and (appealingly) reducing the Legislature by half, by a third or by 20 seats every 10 years before redistricting for the next 30 years.

One, I suppose, can hope.

But veteran Democratic Rep. Mike Sturla of Lancaster County reminds me that things have been worse. In 1991, facing a half-billion-dollar deficit (this year's was $3.5 billion), lawmakers raised taxes by nearly $3 billion (new taxes this year total about $700 million) after Christmas-treeing a budget bill with all sorts of goodies.

"The difference then was everybody got to say what they wanted," Sturla says.

This year, everybody gets to say "Baaaa." *

Send e-mail to


Analysis of Proposed 2009-10 Pennsylvania State Budget
Budget Season 2009
State Budget and Tax Policy
February 4, 2009

The budget proposed by Governor Ed Rendell for the 2009-10 fiscal year manages to avoid the deep budget cuts that many observers feared just a few weeks ago, and that many states imposed in 2009.

The proposed budget includes $3.5 billion in federal fiscal relief over two years and $1.2 billion in new taxes and reprogrammed revenue. Pre-k to 12 education, Department of Public Welfare (DPW) and public safety programs -- including Corrections, Probation and State Police -- all receive increases, while higher education gets a cut. The Medical Assistance program will grow, but the budget includes new assessments on managed care companies and the prescription drug carve-out with a new name -- Smart Pharmacy. Both of these will be hard sells in the General Assembly.

Most state departments would see cuts, including Environmental Protection, Conservation and Natural Resources, and Labor and Industry. The Governor's perennial target -- the discretionary programs in the Department of Community and Economic Development -- take a $215 million hit. The Legislature has restored those funds in previous years, but that will prove more difficult in this economic climate. The Legislature takes a 7% cut, and the state courts' budget would be reduced by 6%.

Education and Health Care Initiatives
The budget provides second-year funding for education adequacy, $300 million in new funds, less than the $418 million appropriation that would meet the six-year implementation goal. Still, the increase was applauded by education advocates.

Despite an adultBasic waiting list that is expected to grow to 282,000 by June, the Governor proposed only a modest expansion in adult health insurance. The budget would increase adultBasic enrollment from 40,000 to 90,000 adults and add the prescription drug and behavioral health benefits necessary to secure a federal Medicaid waiver. The increased enrollment is proposed as a bridge to national health care reform and will sunset after four years.

The budget requires little from Pennsylvania businesses. The planned phase-out of the Capital Stock and Franchise Tax will continue. The Legislature enacted the phase-out, which has reduced state revenue by at least $2 billion dollars, without identifying replacement funds. The Governor did not propose closing corporate tax loopholes as he has in past years, leaving that matter to the Legislature.

State employment takes a significant hit in the budget proposal. The state's workforce complement would decline by more than 2,600 positions. While state workers are perceived as easy targets, a reduced workforce affects both productivity and service delivery.

One hundred one line items are eliminated, mostly small, targeted programs. Some are favorites of legislators that are funded year after year -- after the Governor eliminates them in his proposed budget -- and some are administration initiatives.

The budget includes few new initiatives. The most significant and likely the most controversial is a $550 million tuition assistance plan for students attending one of Pennsylvania's state system schools or community colleges, which would be funded through the licensing of video poker machines.

General Fund
Governor Rendell proposed a General Fund budget of $28.97 billion for 2009-10, an increase of 2.5% over the revised budget for 2008-09. The budget includes $2.4 billion in federal stimulus funds: $1.9 billion in additional Medicaid matching funds and $493 million from the more flexible State Fiscal Stabilization Fund.

State General Fund spending in 2009-10, without federal funds, is $65 million less than in 2008-09 and $406 million, or 1.5%, less than in 2007-08. In the absence of federal fiscal relief funds, the budget would likely include deep cuts in programs, particularly in DPW, that have been spared.

It is important to note that the current year budget remains uncertain. The $28.3 billion 2008-09 budget is balanced with a combination of federal funds, a transfer from the Rainy Day Fund, royalty payments from the Oil and Gas Lease Fund and budgetary savings. The deficit could grow larger during the course of the year if tax revenue fall below revised projections.

State General Fund Expenditures
State general fund expenditures by department are listed on page 35 of the Budget in Brief.

Total Funds
The total proposed operating budget for Pennsylvania in 2009-10 is $61.7 billion, a $192 million increase from 2008-09. State General Fund spending is $26.6 billion or 43% of the total. This is a decrease of $1.7 billion from the 2008-09 budgeted amount of $28.3 billion.

Federal funds are $21.1 billion, up from $18.6 billion in 2008-09. This reflects $2.5 billion in federal fiscal stimulus funding. Federal funds are 34% of the state's operating budget in 2009-10, up from 30% in 2008-09.

Other major state funds (Motor License, Lottery and Tobacco Settlement Funds) make up $4.7 billion or 8% of the total 2009-10 operating budget. All other state funds account for the last 15%, totaling $9.3 billion.

Taxes and Other Revenue Changes
See page C1.6 of the Governor's Executive Budget for a list of proposed revenue changes.

The Governor proposes revenue changes totaling $424 million in 2008-09 and $1.2 billion in 2009-10 to balance the two budgets. In the current fiscal year, the budget would draw $250 million from the Rainy Day Fund and transfer $174 million from the Oil and Gas Lease Fund (proceeds of leasing state-owned lands for oil and gas exploration). Both require approval by the General Assembly.

In 2009-10, the budget includes $1.2 billion in new funds coming from a number of sources, including transfers, specialty tax increases and administrative changes. The largest of these are transfers from other state funds ($375 million from the Rainy Day Fund and another $350 million from the state's Health Care Provider Retention Account). Two new taxes are proposed: a 5% severance tax on natural gas production ($107 million) and a $0.36 per ounce tax on other tobacco products ($38 million). The cigarette tax will be increased by 10 cents from $1.35 to $1.45 a pack, and the earmark of cigarette tax dollars to the Health Care Provider Retention Account will be eliminated, adding $260 million to the General Fund. Finally, the 1-percent discount currently offered to businesses for making timely sales tax payments is proposed to be eliminated, yielding $75 million.

State Fiscal Relief
The proposed 2009-10 budget anticipates $3.5 billion in federal fiscal stimulus dollars over the next two years, $1.08 billion in 2008-09 and $2.44 billion in 2009-10.

$1.08 billion will come in 2008-09 as a temporary increase to the Federal Medical Assistance Percentage (FMAP). This federal match for Medicaid increases to $1.92 billion in 2009-10. Also in 2009-10, the state expects to receive $493 million in State Fiscal Stabilization funds, which the Governor indicated is used to replace General Fund spending in the Department of Corrections, although the amount of this offset is unknown. The final pieces of federal stimulus in 2009-10 include $20.5 million in increased special education funding and $5.7 million to reduce the waiting list for the state's child care assistance program.

The anticipated federal stimulus dollars are not always identified in departmental budgets making them hard to track. Instead, they are listed as part of the state's General Fund expenditures. Including the federal allocation in the state's General Fund total and line items could give the Governor greater flexibility in programming the dollars.

The Department of Education budget can be found beginning on page E14.1 of the Governor's Executive Budget. The total education budget is proposed to increase from $11.4 billion in 2008-09 to $11.56 billion in 2009-10, an increase of 1.5% or $170 million in total.

Pre-k to 12 education would increase by $265 million, or 2.8%, to $9.9 billion. The basic education subsidy would increase by $300 million. Accountability Block Grant and Education Assistance tutoring program funds are included in the basic education line item, bringing the total to $5.8 billion.

Special education is flat funded at $1.03 billion, an appropriation that includes $20 million in increased Federal IDEA funds. Local special education funding is budgeted to increase by $30 million to $439 million with federal stimulus funds.

Pre-k Counts would increase by 10%, while Classrooms for the Future, the Governor's initiative to put laptops in schools, would be reduced from $45 million to $22 million on 09-10. Pupil transportation would increase slightly to $520 million, while Early Intervention funding for 3- to 5-year-olds would increase from $185 million to $189 million.

Funding for higher education would decline from $1.6 billion to $1.5 billion--a 5.6% reduction. The community college subsidy would increase by $5 million to $241 million and capital funds would increase by $1.8 million.

The State System of Higher Education would be funded at the revised 2008-09 level, reflecting a 6.5% cut from 2007-08 levels. The state-related schools, Penn State, University of Pittsburgh, Temple and Lincoln, all sustain cuts as do the non-state-related institutions.

The state library subsidy is cut by $1.75 million or about 2.3%.

Public Safety
Pennsylvania's public safety agencies include the Department of Corrections, the Board of Probation and Parole, and the Pennsylvania State Police.

The General Fund budget of the Department of Corrections is proposed to increase from $1.64 billion in 2008-09 to $1.8 billion in 2009-10, an increase of $160 million, or 10%. This funding boost pays for 2,600 additional beds in five new housing units, as well as increasing health care costs across the system.

Funding of the Board of Probation and Parole would go from $115 million in 2008-09 to $123 million in 2009-10, an increase of $8 million, or 7%. This funding boost will allow the board to meet the increasing caseload, which is projected to grow by 1,600 ex-offenders.

The total proposed budget for the State Police increases from $830 million in 2008-09 to $877 million in 2009-10, an increase of $47 million, or 5.6%. $25 million of the increase comes from the Motor License Fund, $8 million from state dollars in the General Fund, $7 million in new federal dollars, and $4 million in additional funding from the State Gaming Fund. The new funds pay for an additional 22 officers, as well as increased demand for crime lab services and background checks.

Department of Public Welfare
The proposed federal FMAP increase has averted what would have been significant reductions in services to vulnerable Pennsylvania's delivered through the Department of Public Welfare. The budget presumes $1.1 billion in 08-09, $1.9 billion in enhanced FMAP in 09-10 and $1 billion in 2010-11.

Total DPW funding will increase by $475 million or 5%. Medical Assistance will increase from $4.6 billion to $4.9 billion, or 7.2%, and funding for Mental Retardation programs will grow by 4.2% to $1.25 billion. The overall mental health budget will increase slightly, but the budget proposes a 2% reduction in community-based mental health programs and the Behavioral Health Services Initiative (BHSI) programs in DPW and in the Department of Health.

The DPW budget is not without its challenges. The department started the year with more than $500 million less in revenue in the Medical Assistance budget, through the loss of Intergovernmental Transfer Fund (IGT) revenue and the phase-out of assessments on managed-care companies. Both revenue sources have been used to draw down additional federal matching dollars. Medical assistance enrollment surpassed 2 million people in December, and the budget assumes an enrollment of 2,022,000 in Fiscal Year 09-10.

The proposed budget moves Long-Term Living programs that are currently operated through DPW and the Department of Aging into a new department of Aging and Long-Term Living.

Other Initiatives
Video Poker & Tuition Aid Governor Rendell is proposing the legalization of video poker machines to fund college tuition grants for more than 175,000 students attending one of Pennsylvania's state system schools or community colleges. Students from families earning up to $100,000 annually could get grants of up to $7,600.

The Governor said that video poker is already a popular -- though illegal -- form of entertainment in Pennsylvania, with an estimated 17,000 machines in operation today. Through licensing fees and a 50-percent tax on all profits, the state would take in $550 million annually for tuition assistance.

Other Tuition Assistance The budget plan also includes a $35 million boost for tuition grants given by the Pennsylvania Higher Education Assistance Agency and an extra $10 million for community college grants.

Health Care for Adults AdultBasic enrollment would be doubled under a proposal to draw down federal Medicaid dollars for the program. Federal rules require that adultBasic provide prescription drug and behavioral health coverage to be eligible for the federal funds. The program would be funded through $28 million in Tobacco Settlement funds and contributions from the state's four Blue Cross/Blue Shield insurers. The Blues money is not entirely committed beyond 2010. In the last two years, a portion of the cigarette tax that currently funds the MCARE program subsidizing malpractice premiums for doctors and hospitals would also be directed to adultBasic. The expanded enrollment would end in 2013.

Covering More Kids The budget plan also includes a 13-percent increase in funding for the Cover All Kids program, for a total of $407 million in state and federal funding for the program. That will insure 206,836 children -- an increase of more than 23,000 from the current year.

Bridge Repair In the second of a multiyear plan to accelerate bridge repairs, Governor Rendell is proposing to repair 367 structurally deficient bridges with an additional $200 million in bonding -- which is in addition to Motor License Fund money earmarked for bridge and highway projects.

Other Infrastructure Projects The bridge repair funding is part of a larger proposal to bond $537 million for investment in public infrastructure that the Governor is terming "Rebuild PA." Other funding areas include $294.5 million for water, sewer, flood control and dam projects, and $42.5 million for rail and aviation projects.

Business Investments Governor Rendell is calling for $60 million in bonding to fund shovel-ready projects through the Business In Our Sites program and $40 million in bonding for water and sewer infrastructure projects intended to promote economic development. An additional $10 million is also proposed for the Infrastructure Facilities Improvement Grant Program, which has more projects in the pipeline than it has funding.

Alternative Energy State government will continue to make investments from a $650 million fund to promote alternative energy and conservation projects.

Utility Rates The Governor renewed his call for legislation to phase-in over three or four years electricity rate increases that are expected in the next couple of years for most energy customers as a result of the lifting of rate caps.


Release from PA State Rep Doug Reichley
September 21, 2009 Reichley Critical of Budget Deal Between Governor and Legislative Caucuses

Rep. Doug Reichley (R-Berks/Lehigh), Republican vice chairman of the House Appropriations Committee, issued the following statement today following the announcement last Friday of a tentative budget agreement between Gov. Ed Rendell and three of the four legislative caucuses:

“I think all Pennsylvanians welcome the end of the embarrassing spectacle of our budget impasse over these last three months. Not only are we the last state in the nation to reach a budget agreement, we were also the only state in the country where the governor was proposing to increase spending in the midst of the worst economy in 70 years. Regrettably, the agreement reached by the governor and Senate Republicans, House Democrats, and Senate Democrats is not in the best interest of the many residents of our state who are struggling with job losses and lower household incomes.

“The governor and these three caucuses have brokered a deal where many businesses will look at a retroactive increase in the Capital Stock and Franchise Tax. This 53 percent increase will then be continued over the next three years, instead of permanently phasing out the tax as was currently stated in law.

“Individual consumers will see a 25 cent increase per pack in the cigarette tax, a new tax on small cigars, a new 20 percent tax on the proceeds from small games of chance, such as raffles and punchcards, and a new sales tax on the ticket price for admission to concerts, museums, and zoos.
“In addition to these new taxes, the concocted plan calls for taking every last cent out of the $750 million Rainy Day Fund, and raiding the state medical insurance fund which is meant to protect health care providers from disastrous litigation awards. This is not a prescription for fiscal stability either this year or next year when we may be faced with similar budget shortfalls.

“What is even more troubling than the tax hike binge is the absolute lack of detail being provided to the general public. We still do not know how libraries, hospitals, service providers, and school districts will be impacted. The governor was pleased that an additional $300-plus million of state tax dollars will be invested in education as well as his other pet programs, but the question remains whether those funds will be distributed equitably or primarily used to benefit Philadelphia, as has happened in the past.

“For five months, House Republicans have proposed budget plans calling for greater reductions in spending than agreed to last week. Our plan balanced the budget without raising a single tax on businesses or individuals. Unfortunately, the governor has convinced the other caucuses to increase taxes and maintain spending at last year’s $28 billion budget level.

The governor and the other three caucuses have made their deal. Now let them put up the votes to raise taxes and spending.”

Rep. Douglas Reichley
134th District
Pennsylvania House of Representatives
(717) 787-1000
(610) 965-9933
Contact: Todd Abele
(717) 783-3957
Member Site:
Caucus Site:


From the Philadelphia Inquirer
Posted on Wed, Sep. 23, 2009
Panella outpacing Melvin in top-court fund-raising

HARRISBURG - Contributions from organized labor and trial lawyers helped give Democrat Jack Panella a big fund-raising advantage over Republican rival Joan Orie Melvin in the race for an open seat on Pennsylvania's highest court, according to a review of their latest campaign finance reports yesterday.
Panella, a Superior Court judge in Bethlehem, reported raising $1.17 million from the beginning of the year to the Sept. 14 end of the latest reporting period. That compares with $418,000 raised by Melvin, a Superior Court judge in Pittsburgh.

Among contributions to Panella were $100,000 from Local 98 of the International Brotherhood of Electrical Workers in Philadelphia and $50,000 from the Mid-Atlantic Laborers' Political League in Boston.

Both candidates benefited from the deep pockets of the Philadelphia Trial Lawyers Association. Its political action committee - the Committee for a Better Tomorrow - gave Panella $500,000 and contributed $100,000 to Melvin's campaign. - AP

((Now don't get me wrong, I love Judge Orie Melvin for lots of reasons - but the fact that the Philadelphia Trial Lawyers Assn. prefers the OTHER candidate makes me want to support her even MORE....))


Excerpts from a letter from Philadelphia area physician, Albert El-Roeiy M.D., MBA, about Judge Joan Orie Melvin, Candidate for PA Supreme Court:

Dear Colleagues:

We would like to take this opportunity to once again thank you for all of your continued assistance during the recent MCARE abatement drive. We recognize that life is so very busy, and like you, family and professional commitments are our key priorities. In that regard it is extremely important that we continue to strengthen our commitment to the future of medicine in PA, as our quality of professional life and health care of our friends and family depend upon federal and state support. And although the final outcome of our lobbying efforts has not yet been established, it is clear that the medical professionals within PA are truly united in their mission to preserve our future.

Regardless of the outcome, reform represents an ongoing obligation to promote the patient/physician relationship, maintain solvency of our practices, and protect our income. We must maintain vigilance in our efforts to promote healthcare reform.

As many of you know, the political credibility of the medical community in PA reached a high point with the election of Justice Michael Eakin to the PA Supreme Court in 2001....Many in PA political circles perceived that this 2001 election finally demonstrated that physicians and health care professionals are interested in the political process, for which they received well deserved credit in this election for their support and for "turning out the vote."

The 2009 PA Supreme Court general election can be a similar of the candidates for the PA Supreme Court, Judge Joan Orie a strong believer in the rule of the PA Constitution, and does not seek to legislate from the Bench. She is the daughter of and sibling of physicians in Allegheny County. She is also a compelling speaker, and happens to be the sister of Sen. Jane Orie, the Majority Whip of the PA Senate. Judge Melvin is the obvious choice to promote healthcare reform in PA.

The balance of care friendly vs. trial bar at stake in this year's PA Supreme Court election. We are asking for your assistance to once again “turn out the vote” and rally support for the election of Judge Joan Orie Melvin to the PA Supreme Court.

Let us be frank; successful campaigns require financial commitment from supporting constituents. It is costly to get the message out to “turn out the vote” for change. We are appealing to you as a health care professional whose livelihood and family healthcare could stand to be jeopardized if reform is not initiated. We need your financial support; the future of healthcare in PA needs your financial support. Please make this investment today. Thank you in advance for your consideration and contribution. Remember we cannot afford not to act and show our support for Judge Melvin.


From Judge Joan Orie Melvin's website:

Judge Joan Orie Melvin
The Endorsed Republican Candidate for Supreme Court

A Proven Track Record

Born in Pittsburgh, PA. Judge Orie Melvin attended the University of Notre Dame, where she received a B.A. in Economics in 1978, and Duquesne University School of Law, where she was awarded a J.D. in 1981. From 1981 to 1985 Judge Orie Melvin served as corporate counsel and was engaged in a private law practice, concentrating in civil litigation before she was appointed Magistrate for the City of Pittsburgh Municipal Courts, in 1985.

She was then named the first female and first republican Chief Magistrate in 1987 for the City of Pittsburgh Municipal Courts. In this position Judge Orie Melvin established Pennsylvania’s first Domestic Violence Court, which serves as an international and national model. Judge Orie Melvin also implemented community service programs for poor or juvenile offenders convicted on non-violent crimes to instill values of accountability.

In 1990, Judge Orie Melvin was appointed Judge to a vacancy on the Allegheny County Court of Common Pleas and later was elected to a full term in 1991. There, she served in the civil, criminal, and family divisions, presiding over a wide range of cases from complex civil litigation to major felonies to death penalty.

Judge Orie Melvin led the statewide ticket to be the first republican woman elected to the Superior Court and won that victory in November 1997. She has since served there for over 11 years, participating in over 8000 appeals. Judge Orie Melvin has a strong work ethic and is at the top of annual performance statistics every year. She led the statewide retention ticket in November 2007.


Judge Orie Melvin is a proven reformer. As a judge she believes she is a steward of the taxpayer’s dollars and she had the moral conviction to fight the pay raise. She returned the pay raise and the COLA (cost of living adjustment) increase back to the Treasury for the benefit of the taxpayers. She has maintained the lowest amount of judicial expenses. Judge Orie Melvin has refused and will continue to refuse to use taxpayer dollars for out-of-state conferences.


Judge Orie Melvin has been a lifelong Republican. Her faith is the cornerstone of her life. She comes from a family of nine children raised with the principles of God and Country. She and her husband Greg have been married for 25 years and have been blessed with six wonderful children. Her sister is Senator Jane Orie, the present Pennsylvania Senate Majority Whip- the highest ranking female leader in the state.

Her judicial philosophy is firmly based on judicial restraint. She is a strict constructionist and believes the job of judging is interpreting the law and not creating it. Her extensive judicial opinions are evidence of her conservative judicial philosophy.


Judge Orie Melvin is a member of the American Bar Association, the Pennsylvania Bar Association and the Allegheny County Bar Association. She is also a member of the American Judicature Society and the Federal Circuit Bar Association. She is a past member of the Pittsburgh Chapter of the American Inns of Court and the Allegheny County Mental Health/Mental Retardation Advisory Board. She is past President of the Allegheny County Prison Board. She currently serves on the Board of Directors of Passavant Hospital and Soldiers & Sailors Military Museum and Memorial. She also served as a member of the Board of Directors of the Vincentian Home and as a member of the United Way Community Problem Solving Troubled Youth Committee and STOP Violence Task Force.

Judge Orie Melvin was the recipient of Carlow College's Woman of Spirit Award; Duquesne University School of Law Women's Law Association Woman of the Year; the YMCA of Greater Pittsburgh - A Tribute to Women Leadership Award in Government/Public & Civic Service; Anne B. Anstine Excellence in Public Service Award-2004; the Berks County Bar Association Liberty Bell Award-2005; and the Pennsylvania Business & Professional Women-Women in Government Award-2005.

Chairperson, Allegheny County Prison Board, 1996. Judge Orie Melvin oversaw the nationwide search for a warden at the County’s new state-of-the-art prison.

Pioneered first Domestic Violence Court. Judge Orie Melvin demonstrated she had the judicial insight to recognize the criminal nature of domestic violence and to treat the problem head on with court intervention and counseling, long before current public awareness of the domestic violence issue. Since its inception, this court has dealt with approximately 2,000 cases annually in the City of Pittsburgh and it has served as a model for other domestic violence courts across the nation.

Developed Productive Alternatives. Judge Orie Melvin created an alternative sentencing program in 1987 for indigent and juvenile offenders convicted of non-violent crimes forcing offenders to contribute to the community via volunteer service with established nonprofit organizations such as Goodwill, the Salvation Army, Soup Kitchens and Food Banks.


PA Chamber of Business and Industry
Pennsylvania’s for Effective Government
PA State Troopers Association
PA State Corrections Officers Association
Fort Pitt, Lodge #1, Fraternal Order of Police
County Of Allegheny Lodge No. 91, Fraternal Order of Police
Philadelphia Firefighters’ Union IAFF Local #22
The Pennsylvania State Education Association (PSEA)
The Founders and Ex Officials of the Veterans Alumni Association of Allegheny County Pa.
Recommended by the Pennsylvania Pro-Life Federation Pac
Laborers’ District Council of Western PA
Pennsylvania Builders Association
Philadelphia, Lodge #5, Fraternal Order of Police
Firearm Owners Against Crime (FOAC)
The PA Conference of Teamsters

Your gracious financial support makes this campaign possible. If you would like to contribute, please print out our form and mail it with your donation to the address below:

Judge Orie Melvin For Supreme Court
121 State Street
Harrisburg, PA 17101

((Or click here to be taken directly to the Contributions Page:))

Please make checks payable to Judge Joan Orie Melvin for Supreme Court

Corporate contributions are not allowed.

Judge Orie Melvin For Supreme Court, 121 State Street, Harrisburg, PA 17101
(717) 234-1497
Paid for by Judge Orie Melvin for Supreme Court


If you'd like to receive new editions of this Blog as an email, please send your email address to

No comments:

Post a Comment