Corbett signs $27.65 billion budget with minutes to spare

HARRISBURG - A triumphant Gov. Corbett signed the new state budget with minutes to spare before the deadline late Saturday, winning bipartisan support for his pro-jobs agenda, holding the line on taxes, and restoring hundreds of millions in education funding that he had targeted for elimination just months ago.

Flanked by House GOP lawmakers, Corbett put his pen to the first of a series of bills authorizing the $27.65 billion spending plan at 11:45 p.m., just shy of the start of the new fiscal year, while debate still raged in the Senate over a last-minute addition to the fiscal code, an essential budget element.

That addition: a moratorium on drilling that applies only to sections of Southeastern Pennsylvania, a measure kept secret almost until it was time to vote on it.

But even that eleventh-hour dust-up on the Senate floor was not enough to keep Corbett from signing an on-time state budget.

"Our taxpayers deserve government that works for them," the governor said. "Today we reaffirm our commitment to job growth, to education, to the needy, and to the taxpayers."

Corbett's victories were not insignificant: $300 million in business-tax cuts. Securing a landmark no-cap tax-credit deal for Shell Oil to build a natural gas-based petrochemical plant in southwestern Pennsylvania. Launching a pilot program to change the way social services are funded in the counties. And expanding a program that has come to be known in the Capitol as "vouchers-lite," a new version of the Educational Improvement Tax Credit (EITC).

The latter, in particular, was a significant win for Corbett, who has been trying since taking office to get legislative approval for publicly funded school vouchers for poor students to attend private, parochial, or other public schools. The measure approved by lawmakers as part of the budget this weekend is less ambitious than traditional vouchers, but it still targets money to lower-income students by giving tax credits to businesses that help pay for scholarships.

The older version of the EITC was expanded from $75 million to $100 million for businesses that provide scholarship aid to low- to middle-income private school students. The law creates a new $50 million pot of money that would target scholarship aid to pupils in the worst-performing schools.

One of the trade-offs was steep rollbacks in programs that serve the poor and disabled. County services such as drug and alcohol counseling took a 10 percent hit, and the cash assistance program, now totaling $150 million, which has provided bare- bones aid to the disabled since the Depression, was eliminated.

Corbett, who gave the 70,000 Pennsylvania residents receiving the aid and social service providers a one-month reprieve just days before the program's July 1 expiration date, said he would try to find alternative sources of help, including accessing federal or other state programs.

But advocates for the poor said they don't believe there is any other place to turn in what is considered a "last-resort" option for many, including domestic violence victims and those transitioning to federal long-term disability insurance.

"This is their sole source of income," said Michael Froehlich, a staff attorney for Community Legal Services. "The capacity is not there to deal with the influx. It's heartbreaking."

While the legislature did not sign on to Corbett's proposal for a wholesale shift away from designated funding to counties for social services, it agreed to a 20-county pilot program.

The governor also bended to Republican lawmakers, who control the House and Senate, on the spending side. His original proposal reduced spending below 2011-12 levels - at the cost of hundreds of millions in aid to colleges and deeper social-services cuts. But higher-than-anticipated revenue put enormous pressure on lawmakers to bump up spending by 1.5 percent and restore most of the cuts.

Among the last-minute points of contention was a proposal made public only late last week to enact a moratorium on gas drilling in Bucks and Montgomery Counties.

That proposal set off a furor among Democratic lawmakers from Western Pennsylvania and other gas-drilling regions who were stunned to learn that the Southeastern counties would not have to comply with a months-old state law with no such moratoriums and that forbids local zoning exclusions.

But the plan was approved, and there will be no drilling in the untapped South Newark Basin natural-gas reservoir, which lies below much of Bucks County as well as other portions of Southeastern Pennsylvania, until at least 2017.

The legislators would not explain their motivation. But critics quickly pounced on the moratorium, calling it an attempt to curry political favor with constituents in the southeast who are angry over some of the provisions in the state's new fee on natural-gas extraction in the Marcellus Shale, located mainly in the northern and southwestern regions.

To understand how confident Corbett was in the outcome of the budget talks, his staff issued a news release after the budget signing saying that his plan to overhaul the way charter schools operate had been finalized, when in fact, it had failed.

The disagreement between the House and Senate over competing charter school reform plans dragged on almost to midnight. The governor had wanted legislation to create a state commission to authorize new charter schools, taking that power from local school boards.

On Saturday, the two chambers passed dueling proposals, each containing provisions that no one had any information about before they were brought up for a public vote. Both would give the state more say in overseeing charter schools but leave local school boards in charge of authorizing them.

Other education-related initiatives that passed the legislature were one establishing a process to identify and deal with distressed schools, and another that changes the way public school teachers are evaluated, from a system now based entirely on classroom observation to one that would be based in part on student scores.

The big picture

On paper, state spending increases by $471 million, or 1.7 percent, from this year's $27.1 billion. Corbett had proposed holding spending level, but agreed to the increase because of improving tax collections. In reality, state spending increases by $371 million, or 1.4 percent, because of public school grants that were spent in 2011-12, but retroactively budgeted in 2010-11.

Revenue

No change in the state income or sales taxes.

Several tax cuts for businesses would be folded into companion legislation, including the continuation of the ongoing phase-out of the capital stock and franchise tax, and expanded tax credits for businesses that contribute to groups that can provide scholarships to private schools.

Increases in spending

$856 million, a 43 percent increase, for school-employee pensions.

$1.1 billion, a 5 percent increase, for payments on debt.

$308 million, a 3 percent increase, for the judiciary.

$5.4 billion, a 0.9 percent increase, for instruction and operations in public school districts.

$542 million, a 0.7 per increase, for public-school pupil transportation.

$10.6 billion, an increase of less than 0.5 percent, for the Department of Public Welfare, which includes health care for the poor, and child care and services for the disabled.

Decreases in spending

$345 million, a 9.5 percent decrease, in financial assistance for college students. The Pennsylvania Higher Education Assistance Agency would raise its subsidy from $50 million to $75 million to keep funding level.

$125 million, an 8.7 percent decrease, for the Department of Environmental Protection.

$272 million for the Legislature, a 0.3 percent decrease that preserves $12 million Corbett had proposed to cut.

No change in spending

$413 million for the 14 state-owned universities in the State System of Higher Education.

$228 million for Pennsylvania State University.

$136 million for the University of Pittsburgh.

$140 million for Temple University.

$212 million for community colleges, for which Corbett had proposed a $10 million increase.

$100 million for "accountability" grants that help pay for full-day kindergarten in public schools. Corbett had proposed eliminating the program.

$1.9 billion for the Corrections Department.

Welfare

$319 million in savings from the proposed elimination of cash payments for about 70,000 participants in the General Assistance program and new minimum work requirements for about 30,000 General Assistance recipients who are medically needy.

- Associated Press
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