From the President: There's More To The Budget Than Meets The Eye!

August 10, 2009

Dear Friends,

While the immediate crisis of paying state workers and continuing some essential services has been resolved, the state budget impasse continues. Whether you are a state worker, a vendor to the state, or depend upon a program that is threatened to be cut, we are all impacted by this frankly, intolerable situation.

Ultimately a final budget will be passed but while everyone is focused on the matter at hand, there are other important legislative initiatives under consideration that I’d like to draw to your attention:

  • A proposal (HB 1858), to allow counties the option of adding a 1% sales tax to be used for property tax relief and to augment declining state and local revenues, is being promoted by the local government associations. Originally entitled the County and Municipal Property Tax Relief and Collaborative Services Act, we are supportive of this legislation which gives counties and municipalities more options for funding critical services in communities. If we must pay more to fund the government we need, we like the idea of keeping the money in our communities to solve local issues. This legislation is changing on a daily basis, most recently with an amendment to relieve school property taxes too. We are watching this proposal closely and will keep you updated on it. If it becomes too "watered down" and does not help counties and municipalities, we will reconsider our support.
  • Municipal governments and particularly cities are facing significant shortfalls in their pension funds and are obligated to meet funding requirements on an annual basis. Legislation (HB 1874) that will help extend actuarial funding standards for all municipal pension systems and establish a recovery program for plans that are determined to be financially distressed has been proposed to give strapped communities more time to fully fund their ailing pension systems.
  • Separate legislation (HB 1884) would also update the Pennsylvania Municipal Retirement Law to require mandatory membership for any municipality maintaining a severely distressed pension plan. This would pool existing and future pensions from those municipalities into a statewide fund where it can be better managed. Doing so would help overcome the difficult task of blending pension systems, a significant barrier to municipal cooperation for service delivery.
  • Enacting the proposed natural gas severance tax to help fund the state budget shortfall and further allocating a portion of the funds to the Environmental Stewardship Fund and to affected local governments is another legislative priority. Pennsylvania remains one of only two states that allow natural gas drilling but do not assess a severance tax to compensate for the depletion of a nonrenewable resource and for damage to natural resources and public infrastructure.

These initiatives will help our counties and municipalities weather the current fiscal crisis and more importantly, build a more sustainable future. Quality of life begins at home, on your block, in your town. Please follow the news carefully as the budget process unfolds and let your legislators know that you support initiatives that will keep great places to live and work in Pennsylvania.


 Judy Schwank
President and CEO
10,000 Friends of Pennsylvania

Please feel free to contact me in the Harrisburg at the central office of 10,000 Friends. My email is, or call me at 717-234-6070.