Corbett's budget takes risks to boost spending
HARRISBURG — Robust tax collections, new sources of cash and delayed pension and health care payments would help pour hundreds of millions of additional dollars into education and social services under the spending plan Pennsylvania Gov. Tom Corbett presented to lawmakers Tuesday.
For Corbett, a Republican facing a tough re-election battle after balancing his first two budgets with cuts to public schools and social services, it's a turnaround that will require some crafty, and perhaps risky, moves to accomplish.
In his speech, Corbett touted an economy he said is recovering from the recession and the benefits of the booming natural gas industry and a major new transportation funding law he signed in November. He called anew for the privatization of the state's wine and liquor system, an effort that has stalled in the Legislature, and emphasized his administration's efforts to improve public schools and health care.
“This commonwealth is the sixth-largest economy in the United States,” Corbett said during his nearly 40-minute speech. “And we'll be running at full strength as long as we concentrate on three priorities: a great education for every child, a private sector where every business large and small can grow and hire, and a health care and human services system where everyone has choices and everyone is covered.”
Corbett is proposing $29.4 billion in spending for the year that starts July 1, an increase of almost 3.7 percent over the 2013-14 approved budget. The total increase would be more than $1 billion, although a portion would be shifted into the current budget.
Perhaps the most notable new spending he is proposing is a $340 million block grant program designed to ensure that children read and do math at grade level by the third grade, plus more money for child care subsidies, county child welfare services, special education and services for the elderly and mentally disabled.
It would be the biggest one-year spending increase under Corbett, who took office in 2011 facing a collision of a slumping post-recession economy, soaring pension obligations and the end of the federal government's bailout of state governments.
The state government for the first time is projected to break $30 billion in revenue for its main bank account that finances public schools and universities, social services, health care, pensions, debt and prisons. That increase is more than 4 percent over the $29.1 billion expected this year, the biggest such increase in revenue since the economy began recovering from the recession in 2009.
Corbett is not proposing to increase income or sales taxes, the biggest pillars of the state budget, but is proposing to cut business taxes for the fourth straight year.
To spread new money to education and social services without raising taxes, Corbett must deal with more than $1 billion in costs for public employee pensions and health care for the poor.
He will count on more than $300 million in new money from taxes on newly legal gambling in bars, a stepped-up government seizure of unclaimed investment and bank accounts and royalties from drilling on private lands that also extracts natural gas from beneath publicly owned lands.
He will look to postpone nearly $600 million in Medicaid and pension payments until later years and divert $225 million in securities from a health care investment fund to cover more of the state's pension costs. Delaying the pension payments by reducing the allowable increase will also save school districts $130 million next year, administration officials say.
Complicating things are a drop in the federal matching rate in the current Medicaid program and new costs under the 2010 federal health care law, the Corbett administration said.
To help offset those, Corbett is counting on federal approval of changes he wants to make to the current Medicaid program to save $125 million in the first year and, later, more than $600 million annually.
Those changes include paring back benefits for able-bodied working age adults, getting more federal Medicaid dollars to cover tens of thousands of low-income adults who have a temporary disability and moving others off Medicaid and into the federally run health insurance marketplace created by the health care law.
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.
- State police have seized twice as much heroin this year as in all of 2013
- Schools reopen as manhunt for Frein continues
- Justice blames feud for his ouster; chief of court admits he did seek to remove him
- Pennsylvania Supreme Court justice sorry for porn email, blasts boss
- Under bill, taxes could rise for workers in Pa.’s distressed cities — except Pittsburgh
- Schools closed after state police ambush suspect reportedly sighted nearby
- Pennsylvania Turnpike Commission urged to strengthen ethics training