Karen Heller: Corbett reaches into the grab bag of ideas for Pa.

Posted: February 07, 2013

Booze for books! Expanded lottery for geezers! You can't say Gov. Corbett doesn't think outside the Capitol dome.

The governor reiterated his promise to privatize the lottery and liquor businesses during his third budget address Tuesday, which may also be viewed as the start of his reelection campaign.

Corbett wants to sell the lottery to a British-based firm that has aggressive and potentially unrealistic plans to increase venues and revenue. I'm all for reaping more money for old folks, especially since we're all going to be them some day, but the way the governor has pushed the plan has not won him much political capital. The privatized Illinois lottery already has failed on its plan to double the annual return.

The governor yearns to get the commonwealth out of the hooch business, a noble ambition. He's right: The government shouldn't sell liquor. Eight decades ago, Gov. Gifford Pinchot founded the Liquor Control Board to "discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible," a promise state officials have largely made good on to this day.

Other legislators, most notably Gov. Tom Ridge, attempted to kill the LCB with no luck. Corbett's proposal that "we put that money toward education" was one of the rare moments he garnered applause. He's seeking $1 billion through licenses and auctions, and plans to use the proceeds to fund school safety, early childhood education, and other initiatives. It's a novel idea that won't be easy to achieve.

Before he was sworn in, Corbett pledged his troth to antitax crusader Grover Norquist and promised not to raise taxes on, well, anything. However, during his address, the governor asked the General Assembly "to begin a five-year phaseout of an artificial and outdated cap on the tax paid by oil and gas companies on the wholesale price of gasoline," noting that rates have tripled though the cap has not.

"This is not a new tax, nor am I proposing to increase the rate of the existing tax," he said. Right. "It is time for oil and gas companies to pay their fair share of the cost of the infrastructure supporting their industry." This "fair share" is projected to bring in almost $2 billion for transportation projects.

Showing that it's never good to make promises you can't keep, especially to people who didn't elect you, Norquist's spokesman has already condemned the proposal as "a clear tax increase whose burden will be borne by consumers, not companies."

Corbett championed pension reform, the Ambien of legislative issues. The phrase unfunded liability is generally enough to make you roll your eyes back in your head and beg for two weeks in Harrisburg to make it stop.

But pensions are eating away at many state and municipal budgets, and Corbett is right that the problem has been kicked down the road forever without being fixed. His proposal will be met with huge opposition, but without a drastic overhaul, the Commonwealth Foundation projects that taxpayer contributions to fund pensions will explode from $1.7 billion in 2011-12 to $6.2 billion in 2016-17.

State and public school employees are among the last people in the nation to adopt 401(k)-style retirement accounts. Corbett proposes reducing benefits for current employees by about 20 percent. If you think this is going to be accomplished easily, then you've never met an angry teacher.

Of course, pension reform puts the legislature in the particularly tricky position of voting to reduce its own handsome benefits (while the move will most certainly end up being challenged in the courts).

Reducing benefits will not come easily for this august governing body, which in 2005 voted itself a 16 percent raise in the wee small hours of the morning. Harrisburg is home to the nation's largest "full-time" legislature, that is if you define "full-time" as three months off with pay during the summer and almost another three months off from last October to January, the better to campaign for reelection. Eventually, many legislators "retire" with annual payouts that would make you weep.

There may be a method to this tedium. Remember, the former state attorney general won his first gubernatorial election after indicting a warren of legislators and their staffers, a crowd-pleaser every time. He won't raise taxes - well, except for the gas-cap modification - while proposing a modest 2.7 percent budget increase. So he's asked the legislature to do the dirty work, while potentially winning voters who have no desire to continue subsidizing retirement accounts far cushier than their own.

Contact Karen Heller at 215-854-2586 or kheller@phillynews.com, or follow on Twitter at @kheller.

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