Pa. budget chief warns of little wiggle room to narrow gaping state deficit
State officials project a $1.2 billion to $1.4 billion hole in the budget next year, challenging Republican Gov. Tom Corbett and lawmakers to pull off the toughest balancing act of his administration.
Budget Secretary Charles Zogby held his midyear budget briefing on Wednesday, saying that though Pennsylvania is on pace to end the year in balance, it faces significant hurdles in 2014-15. The $1.4 billion figure factors in growth in the budget's 2,000 line items under law and without new spending.
“I think everybody knows it's going to be a tough year,” House GOP spokesman Steve Miskin said.
In previous years, the Corbett administration cut 2,788 state employees and reduced administrative-related costs by $437 million. Three budgets in, there's less to wring out of the $28.4 billion spending plan.
“You just don't have those to fall back on,” Zogby said. “The list of options becomes shorter, in terms of costs and efficiencies.”
The state is obligated to increase its contributions to its two pension funds by $610 million next year. That will eat most of the projected $835 million in revenue growth. The state has a “very significant” $300 million loss in federal dollars used for Department of Public Welfare programs.
Opposed to broad-based tax increases — a commitment on which Corbett is campaigning for re-election — the administration is looking for ways to cut costs and drive revenue. High on Corbett's priority list is addressing pension costs.
“The governor believes we absolutely have to undertake reform to keep these huge increases from happening,” Zogby said. “The status quo is unacceptable.”
Lawmakers in the GOP-controlled Legislature examined pension reform proposals, though none gained majority support. A plan Corbett favored last year would have cut about $180 million by limiting what the state and school districts contribute toward pensions and reducing benefit costs for hires.
House Appropriations Minority Chairman Joe Markosek, D-Monroeville, blamed the tough fiscal times not on pensions but on cuts to corporate taxes, such as the capital, stock and franchise tax Corbett planned to eliminate.
“The governor is trying to make employee retirement benefits a budgetary issue,” Markosek said. “However, his $1.2 billion in business tax breaks have exacerbated the state's current fiscal situation.”
House Democrats have ideas on how to raise $1.5 billion in revenue, including $334 million from a severance tax on natural gas drilling.
Miskin said House Republicans are open to new revenue drivers. In the fall, the state legalized small games of chance at bars and taverns, which could inject as much as $156 million into the general fund, aides estimate.
Legalizing keno, a numbers-based guessing game played on electronic terminals, has broad support in the Senate.
Corbett presents his budget address on Feb. 4. Lawmakers have until July 1 to pass a balanced budget.
Jay Pagni, Corbett's spokesman, said the governor will weigh his priorities against the ability to pay for them as he develops his budget, though he would not elaborate.
Last week, Senate Democrats presented proposals to establish $1.1 billion worth of new revenue and annual savings. That includes expanding Medicaid under the Affordable Care Act for a gain of $400 million in state money offset by federal funds; modernizing hiring and pricing laws at the Pennsylvania Liquor Control Board to gain $125 million; and expanding taxes on smokeless tobacco to gain $36 million.
Senate Minority Leader Jay Costa, D-Forest Hills, said the plans would drive enough revenue to continue to invest more in education and human services programs.
Lawmakers, he said, should examine all revenue options, except for broad-based taxes.
“We need to look under every rock and every stone,” Costa said.
Melissa Daniels is a Trib Total Media staff writer. Reach her at 412-380-8511 or firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Retired LCB official, expected to plead guilty to kickbacks, stands to lose $52K pension
- Judge OKs gender surgery for 48-year-old called mentally incompetent by parents
- Casey, Coons become 32nd, 33rd senators to back nuclear deal with Iran
- Bishop’s ex-assistant in Venango charged with Lutheran synod thefts
- Potential suspension of Pennsylvania AG’s license unusual
- Breazeale Nuclear Reactor powers Penn State engineering program
- Ex-LCB official Short to plead guilty to soliciting, concealing kickbacks from vendors
- Pennsylvania welfare employees targeted in crackdown
- Conneaut Lake Park wants to sell some land