John Baer: Corbett sharpening his budget knife?

Gov. Corbett: Budget woes
Gov. Corbett: Budget woes
Posted: February 07, 2011

I ASSUME that Gov. "Yet-to-be-Seen" Corbett spends his time huddled with budget-meisters figuring how to cut $4 billion to $5 billion from a $28 billion state General Fund budget.

I assume this because: a) it's a daunting task; b) apart from holding a mansion open house and attending the Super Bowl, I don't know what else he's been doing, and c) pretty soon (March 8) he has to go before the Legislature and offer up some answers.

I hope he doesn't blame state woes on Ed "the sportswriter, lawyer, banking consultant, TV commentator, university professor, Brookings distinguished senior fellow" Rendell.

That would bring a retaliatory Eddie bulldogging his way back to the debate. And Corbett's got headaches enough.

By promising not to raise taxes or fees, his options are limited to cuts.

If projected deficits hold, he faces slashing spending 17 percent or more. This means deep cuts in education, health and human services, since that's where most of the money is. And that means added suffering in Philly, where one in four already lives in poverty.

Can it be done? In theory, sure.

State Auditor General Jack Wagner says $436 million can be saved this year by reducing eligibility errors in Medicaid, medical assistance for the needy.

An end to Rendell's annual increased spending on schools is inevitable. A 17 percent cut in the $5.1 billion basic-education budget saves $867 million.

And Corbett says he'll reduce overall spending 10 percent during his four-year term. That's $2.8 billion, or $700 million this year.

Add them up - $436 million from Medicaid, $867 million from education, $700 million across-the board - and, voila, $2 billion saved, half the problem solved.

Now it gets dicey.

Corbett wants lawmakers to reduce their $188 million slush fund, but offers no number. And he wants lawmakers to help pay for their health insurance at the same rate as other state workers.

(Senators pay 1 percent. The House proposes the same rate. Other state workers pay 3 percent. You tell me why lawmakers should pay less.)

These items, worthwhile and overdue, get you only a little more. In fact, you could abolish the Legislature (not a bad idea) to save $300 million, do all the cuts mentioned and still need to find another $1.7 billion.

Luckily, the estimated gain of selling off State Stores is (ta-da!) $1.7 billion.

Unluckily, there's reality.

The Legislature won't really kick in, let alone abolish itself, and the sale of State Stores likely can't be done in time for the July 1 fiscal year.

So there's doubt a budget gets balanced without additional revenue.

Tomorrow, Rep. Greg Vitali, D-Delco, introduces legislation taxing natural gas from Marcellus shale at a West Virginia-like rate to bring in $230 million in revenue this year, up to $700 million a year in years to come.

"I want to get it out there to shape the conversation," he tells me. "It's not a silver bullet, but it is part of the answer."

And Corbett's no-tax pledge?

"The governor needs to look at the situation the way it is, not as a candidate," says Vitali. "Now it's time to govern."

Matt Brouillette, of the Commonwealth Foundation, a conservative think-tank, thinks Corbett can govern without new revenue.

Brouillette's "Five Ways to Cut $5 Billion" includes selling State Stores, ending private "economic development" (he cites tax dollars to professional sports teams, Tastykake and Harley-Davidson), closing public facilities such as golf courses that compete with private entities, and privatizing the Pennsylvania Higher Education Assistance Agency.

"We've been outspending our ability to pay for years," he says, noting that the budget went from $20 billion to $28 billion under Rendell.

So do we get meat-ax management? A compromise that includes taxing natural gas? Something more creative than cuts or taxes?

I don't see how the Guv keeps his pledge and balances a budget without causing harm. I don't see the Legislature coughing up perks. And I sure don't see creativity coming from Harrisburg, where good ideas go to die.

I am, however, willing to wait for answers yet to be seen.

Send e-mail to baerj@phillynews.com.

For recent columns, go to

www.philly.com/JohnBaer. Read Baer's blog at www.philly.com/BaerGrowls.

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