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Pledging 'no gimmicks,' Corbett budget chief warns of cuts

| Monday, Feb. 28, 2011

HARRISBURG — Saying the "day of reckoning has finally arrived," Gov. Tom Corbett's state budget secretary today suggested Pennsylvanians brace themselves for deep spending cuts in the governor's budget address next week.

"The magnitude of our fiscal challenge is unprecedented, certainly unprecedented at any point in recent history," said Charles Zogby, who confirmed the state deficit will be about $4 billion.

It's time, he said, for Pennsylvania to "get its fiscal house in order."

Zogby, who served as secretary of education and policy under former Republican Gov. Tom Ridge, declined to provide specifics about the cuts or the overall budget proposal. He spoke to the Pennsylvania Press Club today.

But his remarks laid out a grim picture for state spending and programs. Asked in a question from the audience whether there will be spending increases, Zogby said, "You may see a few. They will not be terribly dramatic."

When Zogby last served in state government in 2002-2003, the state budget was $20.4 billion. The current budget is $28.6 billion. That's a 37-percent increase, he said. During the same period state revenue grew by 25 percent.

A large chunk of the spending increases under former Democratic Gov. Ed Rendell were for K-12 education, said his former press secretary Chuck Ardo.

"The reality is this administration has chosen to give gas companies a tax break at the expense of our school children," Ardo said, referring to Corbett's opposition to a tax on extraction of natural gas by Marcellus shale drillers. "That's the choice they will have to explain to the parents of Pennsylvania.

"Part of that increase can be explained by inflation," Ardo added. "We're talking different economic times than when Rendell was operating in the mid-2000s."

This year's budget relies on $2.6 billion in federal stimulus funds, which won't be available for the next budget. Some increased spending can't be avoided in medical assistance and corrections, Zogby said.

The current budget relies on one-time revenue transfers from obscure funds such as the oil and gas lease fund, the low-level nuclear waste fund, the highway beautification fund, an economic revitalization fund and the rainy day fund. He said $121 million had been used from the tobacco settlement fund to help the state meet its pension obligations for school employees.

"All of these events and fiscal realities conspire to make the 2011-12 budget the year we get our fiscal house in order. No more reliance on federal stimulus funds, no more gimmicks, no more use of one-time funds. We're focused on the core missions of government and making difficult decisions to live within or means," Zogby said.

His challenge when he accepted the job was to prepare a budget with "no new taxes, no new fees," Zogby said. Corbett, a Republican, made that pledge in the governor's race in defeating Dan Onorato, the Allegheny County executive, in November.

"All the one-time maneuvers and gimicks have been utilized," said Zogby. "Weve kicked the can down the road enough."

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