Pa. budget reliance on federal funds part of national trend

    Pennsylvania wasn’t alone in relying on increased federal support to balance its budget and pay out unemployment compensation over the last few years.Pennsylvania balanced its last two budgets, in part, with billions of federal stimulus dollars.The state also borrowed heavily from the federal government to make up for a shortfall in its unemployment compensation fund.Numbers compiled by the Census Bureau show federal grants to states increased 13 percent in 2009, and made up nearly a third of states’ revenue.Cheryl Lee of the Census Bureau says nearly 60 percent of the federal money was directed to welfare programs.”Those grants were there to make sure those programs were maintained,” she said. “I mean, really, there wasn’t much choice, or else there would be major problems being able to help the people that needed them.”Total state revenue dropped 30 percent in 2009. That’s mostly due to market losses on social trust funds for welfare programs like unemployment and workers compensation, as well as public employee pension funds.Without the social trust fund dive nationwide, state revenue only dipped about 1.5 percent.

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