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Gov. Corbett Unveils Budget Proposal

(Photo Credit: KDKA)

(Photo Credit: KDKA)

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HARRISBURG (KDKA/AP) — Gov. Tom Corbett unveiled his budget proposal today.

It’s an annual ritual, a sort of state of the state address. And for Gov. Corbett it comes at a critical time.

Next year, he is up for re-election, and the polls are not good. Only 31 percent of Pennsylvanians say he deserves re-election.

So, today’s budget address is a chance to reshape popular perception of his performance.

The Governor entered the Chamber of the General Assembly around noon to standard bi-partisan applause. But the future of his budget agenda in both the Pa. House and Pa. Senate depend on his fellow Republicans. They control both chambers.

The ambitious budget proposal would boost Pennsylvania’s core state government spending by nearly three percent while increasing support for public schools, cutting business taxes and counting on the Legislature to adopt long-term changes to public pensions.

The Governor’s ratings took a hit after his first budget reduced the public education budget by over a billion dollars. Last year, Gov. Corbett proposed major cuts in funding higher education, the state university system and related schools like Pitt and Penn State.

This year, the Governor has no more of those budget reductions.

One thing that helps state revenue is running about $153 million above estimates, giving Gov. Corbett a bit more leeway.

“I believe Pennsylvania’s best days are ahead. We are a state that is blessed with a wealth of natural resources as we well know. We always will be the Keystone State because of our unique location in this country and the world,” said Gov. Corbett. “And we are, most of all, home to the hardest working people in the world. Pennsylvania has unlimited potential.”

Overall, the budget for the fiscal year 2013-14 would set spending at more than $28.4 million while boosting spending in the current fiscal year by about $100 million. Corbett expects revenue to rise by a relatively meager amount, 1.5 percent compared with this year’s four percent, and he would plow more than $500 million in reserves into his spending plan.

He would not increase Pennsylvania’s broad-based taxes on sales or income, although he would seek to cut business taxes by hundreds of millions of dollars.

The biggest increases in the approximately $800 million in new spending would come under education, health care for the poor, social services and prisons.

Corbett has warned that he might have to cut aid for crucial programs, such as public schools, unless his plan to change public pensions is adopted. The changes would allow him to spend hundreds of millions of dollars for other programs in his budget plan, but it’s a tactic that is already being questioned by top Republicans who control the Legislature, and public employee unions have threatened a lawsuit.

Public schools would see an increase of $90 million, or more than one percent, while funding for higher education would remain level. Many other agencies and programs would see small increases, while Corbett’s budget plan also expects to see the ranks of state employees shrink by 900.

Corbett, who pledged not to raise taxes when he ran for governor, wants to phase-in higher wholesale fuel taxes over five years, while partially offsetting the increase to consumers by peeling two cents off the per-gallon taxes that motorists pay at the pump. His transportation plan would raise $5.3 billion over the first five years, the governor’s office said.

On business taxes, Corbett would end the capital stock and franchise tax, increase the amount of net operating losses businesses could carry forward from $3 million to $5 million and begin in 2015 a long-term reduction of the corporate net income tax from the current 9.99 percent to 6.99 percent.

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(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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