More 2009-10 Funding Trimmed as 2010-11 Budget Battle Nears

January Gaming Bill Officially Ends 2009-10 Budget Mess as 2010-11 State Budget Lurks in the Wings

by Glenn R. Miller

On January 13, Governor Rendell announced a new round of budget cuts for this current fiscal year due to persistently sluggish revenues.  The total of these new cuts for Fiscal Year 2009-10 amounts to $161 million across state government of which $29 million comes within the Department of Education.  In terms of library services, the most direct impact is a 1% “reserve” set aside from the State Library ($24,000) and a 1% “reserve” set aside from Library Access ($30,000.) 

While these amounts may not seem devastating, it should be noted that the State Library cut comes on the heels of the 48% cut in the budget passed in October, and that the Library Access combined line item had already been cut 73% in that final budget. 

This latest wave of “reserves” (money that is appropriated in the budget but, at the Governor’s discretion, set aside not to be spent) is precisely why PaLA urged successfully last fall that the Office of Commonwealth Libraries process the Public Library Subsidy payments rapidly after the budget was passed.  The rationale back in November was that it was already deep into the fiscal year, that libraries needed the money and , since the budget cut the subsidy by 20%, we could not run the risk that additional subsidy money might be placed “in reserve” if payments were delayed.  We appreciate the responsiveness shown by Deputy Secretary Clare Zales and her agency in moving forward on payments to local libraries quickly and effectively.

Even after most of the budget passed in October, a protracted debate continued into January on the issue of expanded gambling.  License fee revenues from adding table games at Pennsylvania casinos were needed to fill in the remaining revenue hole in the 2009-10 state budget.   This debate delayed payments to higher education.  During this time, PaLA was asked by several of its members (specifically from western Pennsylvania and the Lehigh Valley) about the potential for libraries to receive funding from gaming.  The answer back from leadership in the General Assembly was, “no,” and that the state’s gaming revenues were needed totally to fill in the overall FY 2009-10 budget hole and would not be devoted to any single program, no matter how deserving.

It should be noted that last year’s expansion of gambling resulted in a distribution of revenues modeled after the existing gaming laws.  This means that the lion’s share of the revenues go to state government while some portion is directed to the local areas where the casinos operate.  The rationale is that the local communities hosting gambling operations are the most directly affected.  Therefore, some gaming revenues are set aside for the host municipality and the host county where, in most instances, the local share revenues fund local improvements for things such as roads, utilities, and law enforcement.

It is from this pot of local share revenue that libraries in Pittsburgh and Allegheny County were successful in securing local share revenues that were available for the host municipality and host county (in this case, the City of Pittsburgh and Allegheny County.)  The timing of their request with their area legislators for local share revenues came as the Carnegie Library of Pittsburgh wrestled with deep deficit and a proposal to close some branches, a story widely covered in the Pittsburgh media.  Securing this money required a consensus among the county’s legislators that libraries should be a priority for their local share funds.  Early estimates indicate that this local share from expanded gambling will yield about $700,000 to be shared among Allegheny County’s libraries.

Heading into the 2010-11 state budget cycle, we know that the economy continues to be soft and unemployment remains high.  Revenues for this current year are below estimates to the tune of more than $200 million, an amount that will need to be covered even before the debate begins over revenues and spending for the next fiscal year.  Even as we’re encouraged by signs that the recession may be ending, no one expects that this next budget will be a walk in the park.

PaLA’s Legislative Committee began work early in January on a strategy and message so that PaLA members can hit the ground running as soon as Governor Rendell releases his 2010-11 state budget proposal on February 9th.  Increasing the subsidy and recovering from the damage done by this year’s cuts (especially to the State Library and POWER Library) will be among PaLA’s top priorities.