Budget delivered, but Corbett thus far refuses to sign
Published: July 1, 2014
HARRISBURG — State Lawmakers approved a $29.1 billion state budget Monday night amid questions about whether its revenue projections will hold up during the coming year, but uncertainty surrounds the next step because Gov. Tom Corbett decided not to sign it immediately.
The Republican-controlled Senate approved the bill first on a mainly party-line vote. The GOP-controlled House approved it, also mostly along party lines, shortly before a midnight passage deadline.
But Corbett broke with his pattern of the past three years in not signing the budget following the floor votes, and therefore, missing Monday’s deadline.He wants the General Assembly to pass pension reform as part of the budget package.
“I am withholding signing the budget passed by the General Assembly while I deliberate its impact on the people of Pennsylvania,” he said in a statement.
Options available to Corbett include signing the budget sometime post-deadline or line-item vetoing some appropriations from the budget for political leverage.
This spending plan is shaped by something unusual in Harrisburg — a sharp decline in state tax revenue collections during an election year when Corbett and many lawmakers are on the ballot.
The main debate over the budget is how it attempts to close a $1.4 billion revenue gap without any tax increases. Instead, the budget relies on assuming greater revenue growth than the state Independent Fiscal Office estimates and transferring $246 million from various separate funds to shore up the General Fund. These includes transfers of $30 million from the volunteer fire company loan fund and $100 million from a fund to help small businesses. It would tap the separate Lottery Fund and Tobacco Settlement Fund to help fund nursing home care.
The budget is based on an estimated $95 million from expanded underground gas drilling in state forests and parks, $150 million from shortening the period during which unclaimed personal property must be held, $74 million from issuing a long-delayed Philadelphia casino license and $40 million from better efforts to collect tax revenue, for example.
A $95 million revenue yield from drilling could be realized by leasing more than 31,000 acres to drillers at $3,000 an acre, according to an analysis by the House Democratic Appropriations Committee. The budget would transfer $122 million from the Oil and Gas Fund to support the state Department of Conservation and Natural Resources which oversees parks and forests.
And there’s the projection that several hundred million dollars can be gathered up from previously appropriated money to agencies that hasn’t been spent yet.
Not included in this budget is a severance tax on natural gas production and expanded cigarette tax that many Democratic lawmakers called for. Nor is any of a $153 million surplus for the legislative branch being tapped to bolster the General Fund. The surplus split among the House and Senate and 13 legislative agencies was reported in a recently released audit report for fiscal 2012-13.
The budget continues the phaseout of a state business tax on corporate stock values.
On the spending side, the budget for education provides:
■ A level $5.5 billion for the basic education subsidy for school districts.
■ A $200 million for a Ready-to-Learn education block grant sought by Corbett.
■ $20 million more for special education.
■ $10 million more for school construction.
Elsewhere, the budget:
■ Leaves unchanged existing funding for county-run human service programs, regional cancer institutes and public libraries.
■ Provides $2.75 million to heritage parks, a $500,000 increase from current levels.
■ Cuts state aid to the Delaware River Basin Commission by half.
Meanwhile, the Senate took a step at addressing pensions Monday by approving a bill to put elected state officials, judges and lawmakers under a defined-contribution plan similar to 401(k)style investments upon reelection or retention.
Rep. Michael Tobash, R-125, Pottsville, said several changes are being made to his “hybrid” public pension bill in an effort to line up needed votes. He proposes to combine elements of the traditional defined-benefit plan provided to public employees and the defined-contribution plans for future state government and school district employees. The changes include allowing returning employees to keep their previous pension plan and keeping future state police troopers under the defined-benefit plan.