Pa. set to pass budget

Associated Press

HARRISBURG

After eight years of combative negotiations and angry fingerpointing between Democratic Gov. Ed Rendell and Republican majorities in the Legislature, Pennsylvania’s new governor, Republican Tom Corbett, is poised to win approval of a budget close to the one proposed to a GOP-controlled Legislature, before July and with little drama.

In the coming five days, Republican lawmakers are preparing to pass a $27.15 billion budget without a single “yes” vote from a Democrat.

While most details of the budget are being kept under wraps, the plan would cut spending by about 3 percent from this fiscal year. It would not raise taxes and would demand perhaps as much as $2 billion in spending cuts, if not more, while keeping hundreds of millions of dollars in reserve.

Some taxes would be cut — the rate of the capital stock and franchise tax paid by businesses will drop and businesses will benefit from an accelerated depreciation on expenses — while about half of the spending cuts will target aid to public school and 18 state-supported universities.

Democrats, had they been in control and calling all the shots, say they would have done things differently.

Some cuts would have been unavoidable — Corbett has maintained that the state faces a roughly $4 billion deficit, while Democrats say it is well below $2 billion — but those cuts would not have been nearly as severe, particularly in education aid, top Democrats say.

“I think cuts would need to have been made,” said Senate Minority Leader Jay Costa, D-Allegheny. “There’s no escaping the fact that the revenues are what they are. ... The question is, how deep?”

For instance, Costa and House Minority Leader Frank Dermody, D-Allegheny, say they would have frozen the capital stock and franchise rate and not allowed the accelerated corporate writeoffs, which the Corbett administration says will cost $200 million.

They also say they would have closed the so-called “Delaware loophole” which allows some companies to avoid paying the corporate net income tax in Pennsylvania — a change that a number of other states have made.

Besides the tax changes, Costa and Dermody say they would have used more of the surplus money from the state’s stronger-than-expected tax collections in recent months. And Senate Democrats have proposed a number of steps they say would save money — for instance, by bringing more Medicaid enrollees into managed care programs and by consolidating state purchases of prescription drugs — that Republicans have not said whether they would adopt.

Corbett initially proposed a budget in March that called for approximately $1.7 billion in cuts to aid for public schools and the 18 universities. Republican legislative leaders have eased that back — around $225 million more will go to public schools and another approximately $400 million more will go to the 18 universities. They’ve done so largely by tapping some surplus revenue and pushing for savings and reductions in the wide array of social and human services in the Department of Public Welfare’s $11 billion budget.

In the meantime, public school districts faced with drop-offs in state aid of 20 percent or more, especially Pennsylvania’s poorest districts, are preparing to lay off teachers, close school buildings, raise property taxes and eliminate programs such as full-day kindergarten and tutoring.

Senate Majority Leader Dominic Pileggi, R-Delaware, said he’s sure that there are things he would have done differently had he been the only one making decisions on the plan.