Harrisburg – April 23, 2013 – A new report by the state’s Independent Fiscal Office (IFO) says that more than $620 million in budget savings will be available to Pennsylvania if Medicaid is expanded — a portion of which can be used to better fund schools including the Philadelphia School District, according to Senate Democrats.
“The dollars identified by the IFO can be used for a variety of purposes including the investment in public schools, such as the cash-strapped Philadelphia School District,” state Sen. Vincent J. Hughes, chair of the Senate Appropriations Committee said today at a news conference in Philadelphia’s City Hall.
Hughes was joined at the media gathering by Sen. Jay Costa (D-Allegheny), the Senate’s Democratic leader.
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“The IFO’s report says that if Pennsylvania participates in the expansion of Medicaid and we fully implement the federal Affordable Care Act (ACA) there will hundreds of millions in budget savings annually by 2014-15,” Hughes (D-Philadelphia/Montgomery) said. “The only thing standing in the way is the governor.”
In its ruling upholding the ACA, the U.S. Supreme Court said states have an option of participating in expanding Medicaid to cover individuals who earn up to 138 percent of the federal poverty level. Thus far, Gov. Tom Corbett has balked at allowing Pennsylvania to participate.
Hughes said that the financial windfall that will result from Medicaid expansion can loosen state resources for investment in a variety of priorities such as job creation and schools.
“The IFO’s report is yet another in the long line of studies and reports that have detailed the benefits of expanding Medicaid,” Hughes said. “We can leverage these dollars to solve problems.”
Philadelphia’s School Reform Commission recently called for the state to increase its contribution to Philadelphia schools by $120 million in order to cover a severe revenue shortage. The Corbett administration has slashed funding for public schools by more than $900 million in its first two budgets.
Hughes said that the IFO estimated that there would be $465 million in cost savings and another $155 million in new taxes generated.
A spate of recent reports that outline significant benefits for Pennsylvania from the expansion of Medicaid include studies from the Rand Corporation and the Pennsylvania Economy League, among others.
The IFO report said that as a result of Medicaid expansion, federal expenditures will increase by $4 billion annually, the Gross State Product will rise by $3.1 billion annually, taxable earnings will grow by $2.1 billion.
Other reports have said that employment will increase as a result of the expansion. Estimates of job creation range from 35,000 to 41,000 per year.
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