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Governor Wolf’s Budget Proposal Protects Hospital Supplementals and Tobacco Funds and Spotlights Workforce Development

February 05, 2019

Governor Wolf introduced his proposed state spending plan for the 2019–2020 fiscal year. The budget maintains 2018–2019 funding levels for hospital payments, including the Medical Assistance Supplemental payments for critical access hospitals, obstetrics/neonatal services, hospital burn centers, and trauma centers.

The $34.1 billion budget plan calls for a 2.8 percent increase over last year and does not include any broad-based tax increases.

“Today, the Governor demonstrated his ongoing support of Pennsylvania’s hospitals through sustaining vital hospital funding lines within his proposed state budget,” said Andy Carter, President and CEO of The Hospital and Healthsystem Association of Pennsylvania, in a statement. “Pennsylvania’s most vulnerable and complex patients rely on these funds that are directed to obstetrics and neonatal intensive care units, critical access hospitals, and trauma and burn centers.”

“Additionally, we thank the Administration for prioritizing health care by preserving the programs that are supported by the Tobacco Settlement Fund.

Citing Amazon’s reasoning for not locating their second headquarters in Pennsylvania, the Governor spoke in-depth about the need to develop Pennsylvania’s workforce and the need for his administration to be responsive to industry issues.

Carter was encouraged by the Governor’s dedication to developing Pennsylvania’s workforce.

“Like many other sectors of the state’s economy, the health care community is taking a serious look at how we prepare for the health care needs of the future,” Carter continued. “It is clear we cannot meet those needs without a highly skilled and talented workforce, and we are collectively taking the steps to understand how we do so. We welcome any opportunity to partner with the Commonwealth to support this mission.”

Pennsylvania’s hospital community supports 650,000 family-sustaining jobs throughout the commonwealth.

The budget proposal also reflects a continued commitment to addressing the opioid crisis in Pennsylvania by dedicating an additional $1.5 million to expanding access to naloxone for first responders.

Similar to past years, the Governor has proposed a severance tax on natural gas, although it has not been included as part of the official state budget. His proposal is to bond against future severance tax revenues to invest $4.5 billion over four years in Pennsylvania’s infrastructure. His plan also includes another push for a minimum wage increase to $12 per hour.

The legislature will begin its review of the Governor’s budget through each chamber’s respective appropriation committees, starting the week of February 11.

HAP will continue to review the Governor’s proposals, and provide additional analysis in the coming weeks.

For additional information, please contact, Jeff Bechtel, HAP’s senior vice president, health economics and policy; Jolene Calla, Esquire, HAP’s vice president, health care finance and insurance; or Stephanie Watkins, HAP’s vice president, state legislative advocacy.

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