View Full Version : Senate OKs bill giving funds to states

08-07-2010, 08:36 PM
$26 billion in Medicaid, education money goes before House on Tuesday
Friday, August 06, 2010
By Tom Barnes and Daniel Malloy, Pittsburgh Post-Gazette

HARRISBURG -- Now that a bill giving states $26 billion in federal Medicaid and education funding is halfway home, the Pennsylvania School Boards Association hopes the extra money will allow school districts to retain existing teachers and recall some who have been laid off.

The U.S. Senate's final approval of the bill, on a 61-39 vote Thursday, also set off a political skirmish between the two U.S. Senate candidates, with Democrat Joe Sestak, aided by Democratic State Chairman Jim Burn and some public school teachers, assailing Republican Pat Toomey for opposing the federal money. Democrats say it will save many jobs, but a Toomey aide called the bill a "bailout for state governments that were fiscally irresponsible."

Timothy Allwein, assistant executive director for the school boards group, welcomed Senate approval of the bill, which faces a U.S. House vote Tuesday.

The measure provides $10 billion nationally for education and another $16 billion for medical assistance for lower-income people. Of the total, Pennsylvania will get $387 million for education and $600 million for Medicaid.

Mr. Allwein said there are some restrictions on the money for schools. First, it can be used only for personnel costs -- paying salaries and benefits to retain current teachers and other workers, to recall laid off school employees or to add new staff for pre-kindergarten, elementary or secondary schools. It cannot be used for materials, books, cafeteria costs, maintenance, utilities or other non-personnel costs.

Also, a greater share of the money will go to school districts that have a high proportion of students from low-income families or a lot of students whose first language isn't English.

"Districts that tend to be urban will be getting a little bit bigger share of the pot," Mr. Allwein said.

With the additional $600 million in federal Medicaid funds, towns and counties in the state won't have to lay off firefighters, emergency services workers and social service case workers, Gov. Ed Rendell said.

In a conference call with reporters Thursday, Democratic Chairman Burn attacked Mr. Toomey for opposing the bill, claiming he cared only about "protecting corporate fat cats, not middle-class people who might lose their jobs. I find that appalling. He's out of touch with the needs of this state. Why is he standing up for corporate special interests?"

In reply, Toomey aide Nachama Soloveichik said that Mr. Toomey has always opposed taxpayer-funded bailouts. She said Democrat Sestak "voted to force taxpayers to bail out the Wall Street banks [and] the auto companies, so it is not surprising that he wants to force taxpayers to bail out state governments that were fiscally irresponsible. Will the bailouts ever end?"

Linda Cook, a teacher in a suburban Philadelphia district, joined Mr. Burn in welcoming the new federal aid, saying, "This isn't a bailout. It ensures our students are prepared to compete. Without this, teachers would lose their jobs and class sizes would increase."

Mr. Rendell has predicted up to 12,000 layoffs of public workers in Pennsylvania if the bill isn't approved by Congress. It's not a complete panacea, however. State officials still must decide how to cover a 2010-11 budget hole of $250 million -- the difference between the $850 million in Medicaid funds Pennsylvania was hoping for and the $600 million that it's getting.

Mr. Rendell and legislative leaders are to meet next week on how to close that gap. Mr. Rendell has said some state government layoffs still are likely in September.

State Senate leaders want to close the gap totally with spending cuts, while Mr. Rendell wants additional revenue for state coffers, such as raising $75 million by ending the "vendor discount," a bonus that retailers get for submitting sales taxes on time.

On Thursday, a major state union, Service Employees International Union Local 668, urged officials to "raise revenue without cutting programs." Besides ending the vendor discount, local President Kathy Jellison said, "big oil" should pay a severance tax on natural gas pumped from areas of Marcellus Shale.

She also called for ending the "Delaware loophole," in which corporations avoid Pennsylvania taxes by headquartering some operations in Delaware.

She said the union is "ready to assist state officials in identifying ways to address this budget shortfall without layoffs and program cuts."

In Washington, top Senate Democrats had proposed various ways to extend to states the Medicaid reimbursements that began in last year's stimulus bill, but they were rebuffed by Republicans over concerns about adding to the deficit.

But this week, Senate Majority Leader Harry Reid put together a $26 billion package that's funded by spending cuts, including to the food stamps program, and a tax increase on multinational corporations and was able to get enough support. Most Republicans still opposed the bill, calling it a wasteful bailout to the states and teachers unions.