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Pennyslvania Gov. Corbett's $29.4B budget plan bets on keno

| Monday, Feb. 3, 2014, 11:24 p.m.

HARRISBURG — Gov. Tom Corbett on Tuesday rolls out a $29.4 billion state budget that increases spending by 3.3 percent and counts on new revenue from legalization of keno, a fast-paced game typically played in bars and restaurants, his budget secretary said.

Keno revenue would fortify programs for seniors under the state Department of Aging through the Pennsylvania Lottery, freeing up other revenue for general purposes.

It's not clear how Corbett proposes to address an expected $1.2 billion to $1.4 billion deficit. His budget emphasizes increases, rather than drastic cuts he said were necessary in 2011, when he took office with a more than $4 billion deficit.

Keno initially would bring in $40 million annually, Budget Secretary Charles Zogby said. The budget counts on $100 million from small games of chance, which lawmakers legalized last year. The budget does not raise taxes and continues the phase-out of a tax on business assets by 2016, Zogby said.

“For three years, we have worked to turn Pennsylvania around by cutting wasteful spending, responsibly balancing our budgets and keeping taxes low so the private sector can grow and create more jobs, and so you can keep more of your hard-earned money,” Corbett, of Shaler, said on Monday in a campaign statement to supporters.

Corbett is working with lawmakers to legalize keno, the administration says, since Attorney General Kathleen Kane last year shot down his plan to privatize lottery management. The plan relied heavily on keno, for which Corbett didn't have legislative approval. Department of Revenue officials have said the administration could take the action on its own.

Pennsylvania would join 15 states and the District of Columbia with keno, according to the National Conference of State Legislatures. Most neighboring states allow the electronic numbers game that Revenue officials compare in concept to Pennsylvania's old Super 7 lottery game.

Zogby, a cabinet member for the Republican governor, told the Tribune-Review the spending blueprint boosts overall education funding by $362 million, or 3.5 percent. It includes a $241 million “Ready to Learn” block grant that would be disbursed to public schools on a “student-driven formula” biased toward poorer districts, Zogby said. It includes a $20 million increase for special education, the first increase in six years.

In addition to education, Corbett will emphasize health care and jobs, Zogby said.

Facing re-election in November with consistently low job approval from voters, Corbett will address a Republican-controlled General Assembly that must approve a budget by June 30. Democrats will pounce on his statements.

“After three years of devastating budgets and a lackluster economy, Tom Corbett's desperate re-election campaign even hired a George W. Bush speechwriter to help mask the failure of the official administration's first and last term,” said Democratic Party Chairman Jim Burn of Millvale. “Rather than utilizing the seven taxpayer-funded staff members in the governor's press office, Tom Corbett is frantically grasping for any source of hope in what is sure to be a failed re-election bid.”

A problem would be the reverse: using taxpayer-paid staff for the campaign, Corbett's campaign manager Mike Barley said.

Corbett will propose $131 million in pension relief for school districts, which, if approved, means more funding for education programs, Zogby said, though he won't make a detailed pension proposal. Corbett previously proposed lowering the so-called “multiplier” formula used to determine pension benefits for employees.

The governor will allow lawmakers to decide but would like a “tweaked” version of a bill by Rep. Mike Tobash, R-Pottsville, Zogby said. Tobash's bill blends defined benefit plans with private sector-style plans.

The state's more-than-$40 billion pension liability isn't the fault of public employees, who contribute about 7 percent of each paycheck to pensions, said Stephen Herzenberg, executive director of Keystone Research, a liberal- and labor-leaning think tank. State and school districts haven't met contribution obligations, he said.

“Will Gov. Corbett's budget repeat the mistakes of the past by diverting contributions required (under state law) to the governor's other priorities?” Herzenberg asked.

Brad Bumsted is Trib Total Media's state Capitol reporter. Reach him at 717-787-1405 or

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