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Experts expect Corbett budget to be 'hard sell'

| Saturday, Feb. 9, 2013, 11:30 p.m.

HARRISBURG — Gov. Tom Corbett balanced his budget proposal on a tripod of complex issues — transportation funding, liquor store divestiture and pension reform — that could wobble under the General Assembly's scrutiny.

Political experts say it appears Corbett crafted a plan with features meant to attract bipartisan support, but many remain skeptical that the governor can win approval for all three.

“He's going to be lucky to get any of these,” said Jerry Shuster, a professor of political rhetoric at the University of Pittsburgh. “All three would be a hard sell.”

W. Wesley McDonald, a professor of political science at Elizabethtown College in Lancaster County, calls the budget proposal a “political calculation … with an eye toward the next election” in 2014.

Even with a Republican-controlled legislature, the Republican governor from Shaler could have difficulty in assuring passage of the three issues, McDonald said.

“The governor knows he has an ambitious agenda, but it is one he also knows the people of Pennsylvania want,” said Corbett spokeswoman Kelli Roberts. “And he's confident, working with the Legislature, they will be able to make the big changes promised to Pennsylvanians.”

What drives Corbett's agenda, Roberts said, is not politics but “what is in the best interest of Pennsylvanians and their future.”

A sure shot?

Of the three issues, raising money for road and bridge repairs and mass transit likely has the best shot with lawmakers despite a contentious provision to lift the cap on the wholesale tax on gas stations.

“This is not a new tax, nor am I proposing to increase the rate of the existing tax,” Corbett told the Legislature on Tuesday.

Yet Shuster argues: “That's exactly what this is,” and he believes station owners will pass the cost on to consumers.

What's important is that Corbett's proposal to raise $1.8 billion a year provides “political cover” for Republican lawmakers to vote for his transportation plan, said Wesley Leckrone, an assistant professor of political science at Widener University.

Lifting the cap, rather than increasing the state gasoline tax, gives Corbett “plausible deniability,” Leckrone said. “Corbett can say, ‘We don't know it will be passed on to people, so you can't say it is a tax.'”

Transportation funding bills typically pass with bipartisan support, though some Republicans won't vote for this one, said House Appropriations Chairman Bill Adolph, R-Delaware County.

Corbett administration officials said they do not know whether gasoline prices would increase at the pump.

Jason Wagner, managing director of the Pennsylvania Highway Information Association, said lifting the cap might mean about a nickel-per-gallon increase each year over five years if all of the increase is passed on to consumers.

To offset that, Corbett proposed trimming the liquid fuels tax by a penny per gallon this year and another penny next year.

Overall, the governor offered “a great political plan (that) helps Corbett and his Republican constituencies and also hamstrings his adversaries, like the unions,” Leckrone said. “I can't sit down and design a better plan. But I'm not sure it will work.”

Tied together

It's an intricate plan, observers acknowledge.

Corbett tied liquor store divestiture and pension changes to education spending.

If lawmakers agree to sell the state stores and privatize wine and liquor sales, school districts would get $1 billion in grants, Corbett said. The money from the sale of store licenses would be spread out over four years to 500 districts for restricted uses such as capital projects.

That could entice lawmakers who need to show constituents that they put money toward education. Yet it could become a tactical error because legislators from both parties complained about the linkage, said Tom Baldino, a political science professor at Wilkes University in Wilkes-Barre.

Even with a $1 billion carrot, history argues against Corbett's unloading the liquor stores. Two Republican governors, Tom Ridge and Dick Thornburgh, could not persuade legislators to sell the state stores. Thornburgh cited union opposition as the biggest obstacle.

“The governor does not believe Pennsylvania should be in the liquor business,” Roberts said. “It's not a function of state government, and therefore, he supports full privatization. ... His plan for full privatization puts us on a path to invest $1 billion in our education system, which, unlike selling liquor, is a responsibility of state government.”

Corbett's budget suggests spending $90 million more for basic education. That money and other programs would be at risk if legislators do not approve pension changes designed to save millions in the long term for school employees and state government employees' retirement funds, said Budget Secretary Charles Zogby.

It's a first step toward trying to close a $41 billion pension funding gap that will increase to $65 billion by 2018 without action, according to budget office figures.

Pension costs consume 60 percent of new revenue in the 2013-14 budget, the budget office said. That's $500 million the state could spend on core programs and services, according to Zogby.

“Reforming pensions is not going to be easy,” Corbett said. “We understand the challenges ahead.”

Affecting employees

Baldino believes pension changes could be Corbett's steepest hurdle because “vested interests on all sides of the issue make it difficult.”

His plan would reduce state payments to pension funds for immediate relief but, to make up for that, would ask lawmakers to reduce benefits for current and future employees starting in 2015. The stickler is changing benefits for current state employees.

David Fillman, executive director of the American Federation of State, County and Municipal Employees, said that would be an “absolute violation of the trust” between the state and unionized employees. AFSCME would go to court if lawmakers passed such a provision, he said.

Senate GOP leaders have expressed reluctance to change benefits for existing employees. Senate Majority Leader Dominic Pileggi's “review of the case law shows serious constitutional hurdles” in doing so, said Erik Arneson, spokesman for the Delaware County Republican.

There appears to be considerable support for shifting new employees from guaranteed pensions to 401(k)-type plans. But that would not save money immediately.

“Sen. Pileggi believes that new employees should be moved to a direct contribution plan,” Arneson said.

Brad Bumsted is state Capitol reporter for Trib Total Media. Reach him at 717-787-1405 or bbumsted@tribweb.com.

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