He did call for the creation of new state report cards for school districts and for reinventing teacher job evaluations.
The proposed block-grant cut elicited the most reaction.
If the money is not reinstated, the Philadelphia School District - already facing a $61 million dollar deficit this school year - would lose $21 million more, and area suburban districts an additional $10.4 million.
Jerry Jordan, president of the Philadelphia Federation of Teachers, was not pleased. The budget "shortchanges our students again," he said.
School Reform Commission Chairman Pedro A. Ramos, a Corbett appointee, said the district "appreciates the governor's effort to spare basic education from the difficult cuts proposed" to balance the budget.
Last year's budget chopped $860 million in aid to school districts, including federal stimulus money that was no longer available.
Delaware County's Chester Upland School District would lose almost $1 million if the block grant is eliminated. The district ran out of money earlier this year and needs millions more in state funds to stay open.
A cut "would mean diminishing an already impoverished educational program," said acting Assistant Superintendent Thomas Persing. "We need more funding, not less."
Bucks County's Bristol Township School District was looking at a $12.5 million gap between projected revenues and expenditures before Corbett's proposal, even with a proposed 2.1 percent tax increase imposed on district residents. It would lose $467,000 in state block-grant funding if Corbett gets his way.
"We already have a steep hill to climb," said Superintendent Samuel Lee. Losing more state funding, he said, would be "disappointing."
In addition to chopping the block-grant program, money in the budget for Head Start and another pre-kindergarten program would be cut about 5 percent.
Funding for another early intervention program would increase about $8 million.
Some funding would go up, as mandated by state law. The state share of school employee retirement payments would increase $315 million - 53 percent.
The governor wants to freeze participation for a year in a state school construction reimbursement program, while it is reviewed. There are 230 projects in the pipeline and the state says it has too little money to pay for them.
Special education funding, a rising cost in many school districts, stayed flat in Corbett's proposal, as it has been for several years.
Corbett also proposed cutting the number of Keystone Exams, a Rendell administration initiative intended to provide a statewide benchmark for students. To graduate from high school, current eighth graders now would have to pass tests in 10 subjects by 2017.
Corbett wants that cut to three: algebra I, biology and literature.
Corbett would merge school transportation funding and the state's reimbursement for districts' contributions to Social Security on behalf of employees with the main education subsidy, the Basic Education Fund.
Money for the merged funds - the "Student Achievement Education Block Grant" - would total $6.5 billion, an increase of $21.8 million over the separate appropriations last school year.
The education budget proposal drew fire from the Pennsylvania School Boards Association.
"School boards are struggling with cuts in state funding, losses of local tax revenues, and virtually no relief from costly state mandates - a prescription for undermining the quality of education being provided to our children," executive director Thomas Gentzel said.
The conservative Commonwealth Foundation praised the governor. "We have doubled education spending in the last 15 years," spokesman Nathan Benefield said. "School boards want more money, but we've reached a tipping point. There is no more available."
Contact staff writer Dan Hardy at 215-854-2612, firstname.lastname@example.org, or on Twitter @DanInq.
Staff writer Kristen Graham contributed to this article.