Corbett unveils budget with focus on schools, pensions

Posted: February 06, 2014

HARRISBURG - The $29.4 billion budget that Gov. Corbett unveiled Tuesday was packed with what millions of Pennsylvanians would consider good news: A big boost for public schools. More money for the disabled. Fewer taxes on businesses.

But the debate that will dominate the Capitol over the next few months will focus on one key question: Is Corbett's plan to pay for it all too risky?

The Republican governor's blueprint for the fiscal year that begins July 1 calls for increasing spending 3.6 percent from the current year's $28.4 billion - the largest spending bump of his tenure. It also contains the biggest funding increase of his administration for public education, $400 million.

Corbett, who faces a potentially tough reelection battle in the fall, is proposing to pay for it through a mix of new proposals and one-time infusions of cash.

Still, the new spending represents a big change for the Corbett administration, whose budgets over the last three years have been hobbled by postrecession slumps and have delivered financial punches to public schools and programs for the poor and disabled.

For his part, the governor argued during his 35-minute speech that belt-tightening over the last three years, although painful, has begun to pay financial dividends.

"Things are coming together," Corbett told a joint session of the legislature during his budget address, which this year was crafted with the help of a veteran presidential speechwriter.

"Not so long ago," he added, "Pennsylvania was in pretty serious trouble, and there was no easy way out. We took some of the worst hits of the Great Recession. . . . All of this was our starting point, and we have a lot to show for three years of hard choices and honest effort."

Corbett's budget plan banks on hundreds of millions of dollars in savings from yet-to-be-approved initiatives. One would rein in the cost of public-employee pensions by postponing payments until later years; another would make changes to the state's Medicaid program. The latter requires federal approval.

Both are big ifs.

The governor also is relying on several one-time infusions of cash, including nearly $400 million from postponing payments to Medicaid providers and $75 million from new leases to extract natural gas from beneath state-owned parks and forests through drilling on private adjacent lands.

No sooner had he delivered his address than legislative Democrats decried Corbett's budget as "election-year pandering" and a "shell game" that relied on raiding one fund to help another - a short-term and unreliable fix.

"Gov. Corbett dug a budget hole for Pennsylvania through three years of failed policies and wrong priorities," said Rep. Joe Markosek of Allegheny County, the ranking Democrat on the Appropriations Committee. "Now, he is playing political games and using one-time budget gimmicks to balance his election-year budget. It's disingenuous and fiscally irresponsible."

Markosek argued that the budget continued to ignore long-term solutions to fiscal troubles, such as imposing a gas-drilling impact fee, taxing smokeless tobacco, and closing the loophole that allows companies to incorporate in Delaware and avoid paying Pennsylvania taxes.

Still, some Democrats privately said they were at least intrigued by Corbett's proposal for an additional $400 million for public schools.

The majority of the new money, or $240 million, would fall under a new initiative called the "Ready to Learn" block grant, which Corbett said was designed to ensure that every child was reading and doing math at grade level by the third grade.

The governor on Tuesday did not detail exactly how the money would be distributed. But other administration officials have said the initiative would give school districts a choice in which educational programs they could fund - and the range of choices would be tied to academic performance, with poorly performing districts having fewer options than their better-performing counterparts.

Administration officials also have said the money would be doled out with an eye toward helping lower-income districts, factoring in not just a district's enrollment, but the percentage of its students who were English-language learners, as well as the percentage of aid it would receive from the state.

Separately, Corbett also is proposing an additional $20 million in special-education funding and an extra $10 million to help 1,670 children from middle- and lower-income families attend prekindergarten programs.

Higher education, however, would get no boost. Of the state-related schools, Temple University's subsidy would remain at $139.9 million; Pennsylvania State University, $229.6 million; the University of Pittsburgh, $136.2 million; and Lincoln University, $13.1 million.

But Corbett is proposing a program called Ready to Succeed, which would offer $25 million in scholarships through the Pennsylvania Higher Education Assistance Agency to help students with tuition.

And the governor will propose a fourth straight year of tax cuts for businesses, while holding personal-income and sales-tax rates steady.

Senate Majority Leader Dominic Pileggi (R., Delaware) said after the budget address that he believed the governor had struck many positive notes in his speech, but added, "This is just the beginning point."

As it stands, the cost to maintain the state government pension system and to pay the state's share for public school workers is set to increase $600 million.

Corbett is proposing to temporarily lower the minimum amount state governments and school districts have to pay into the pension funds. But critics say it simply postpones the problem.

Politically, Corbett's campaign could get a boost from having some extra cash in government coffers to spread around.

Poll after poll shows that a majority of voters believe he does not deserve reelection. Much of the criticism has centered on cuts the governor made in his first year in office to public schools and programs for the poor.

Tuesday's budget address was the last of his first term, and Corbett early on showed he understood both its governmental and political importance. His message, which was delivered to a joint session of the legislature, was written by John P. McConnell, who wrote for President George W. Bush and Vice President Dick Cheney.

House Majority Leader Mike Turzai (R., Allegheny) called the goals laid out in Corbett's budget "laudable" and said he believed the legislature could help deliver them.

"There is a bit of work to be done," said Turzai, "but I think you will see an effort to get there."


INSIDE

City gets more money and 2 SRC leaders. A9.

Education plan spurs mixed response. A11.

Corbett: Allow drilling in state forests. A11.


acouloumbis@phillynews.com

717-787-5934 @AngelasInk

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