Health - February 3, 2017

Gov. Wolf taps outside firm to help with Budget

The Philadelphia Inquirer reports that a New York City consulting firm has been called in to help address the Commonwealth’s growing budget situation. The firm, McKinsey & Co., is being paid a reported $1.8 million dollars to assist the state in finding ways to increase revenue and save money. The state is currently facing a deficit of $700 million and is on track to end up with a $3 billion budget hole by the end of the fiscal year. That’s a large gap to fill. The contract awarded to McKinsey & Co. was deemed an “emergency six week contract;” meaning it was a sole source contract and not “competitively bid.” While it’s not unusual for outside contractors to be brought in; it is has not been the norm for the Commonwealth. And while the firm has been tapped to find $1 billion in savings, $1.8 million is still being spent to get there.

Republicans are critical of the move; citing the thousands of state employees that could be tapped for “creative” solutions and that sourcing an outside contractor for this particular issue is atypical. As far as what kinds of savings McKinsey and Co. have come up with; that remains to be seen. Republican spokesman, Steve Miskin, told the Philadelphia Inquirer that House Republicans are looking forward to hearing from the Governor “what they were up to and why.” The Wolf administration has said that that majority of the firm’s recommendations will be rolled into the Governor’s budget address next Tuesday.

Wolf has been making moves in recent weeks to reduce the deficit; including closing two mental health facilities, a state prison and announcing that he’d like to consolidate four state departments into one. Wolf is proposing merging Health, Aging, Human Services, Drug and Alcohol Programs under the umbrella of the Department of Health and Human Services. That announcement has also sparked some conflict and came amid the dismissal of the Secretary of the Department of Drug and Alcohol Programs. Secretary Gary Tennis had not been supportive of the move and has stated that was the reasoning for his being dismissed. The Governor’s Office said they do not comment on personnel issues.

We’ll be watching and reporting next Tuesday, February 7, as the Governor gives his budget address.