Inquirer Editorial: Revenue problem

Gov. Corbett unveiled a "let the next guy worry about it" budget proposal this week amid appropriate skepticism about how he would pay for promised increases in spending on education and services for the elderly and disabled.

The governor's plan relies too heavily on putting off the state's bills. He would postpone full pension payments, repeating a mistake that helped the state accumulate unfunded liabilities. He would delay payments to Medicaid providers, straining the health-care industry. And he would again raid the Oil and Gas Lease Fund, which is supposed to offset the impacts of natural-gas drilling, to cover operating expenses.

With $400 million in new spending, Corbett is proposing the greatest boost to education funding since he took office, which is a welcome turn in the right direction. However, it would not cover the $1 billion loss to education spending after federal stimulus funds dried up. School districts around the state have reduced programs and laid off essential personnel to cope with those cuts.

Even as he proposes more funding for Philadelphia schools, Corbett would shortchange them by revising a block-grant formula, according to the ranking Democrat on the Senate Appropriations Committee, Philadelphia's Vincent Hughes. While the city would have gotten $50 million under the old formula, it would get $29 million under Corbett's. That isn't much for a district that measures its deficits in the hundreds of millions.

There are things to like in Corbett's $29.4 billion budget. Beyond the increase in school funding, accompanied by added support for early-childhood and special education programs, he would expand job training, services for the elderly, and shelter for abuse victims. He would also devote $25 million to a college scholarship fund for students from middle-income families, to be distributed based on academic achievement and financial need. On the revenue side, Corbett would allow the state to take unclaimed property faster, raising about $150 million.

But there is a troubling reliance on gimmicks and a failure to raise enough recurring revenue to keep the governor's promises. He would permit natural-gas drilling under state lands to raise $75 million, an estimate that may be overstated. He wants to continue cuts to the capital stock and franchise tax, even though stalling them could yield $75 million.

Corbett also refuses to extract more revenue from gas drillers, who are consuming a nonrenewable resource that could produce up to $600 million more in annual revenues. Nor will he expand Medicaid as other states have, forgoing $400 million in federal funds to pursue his own convoluted alternative.

This is an election-year budget designed to smooth Corbett's relations with disgruntled voters. But it is so flawed that it cannot please the fiscally responsible and socially concerned.

Now it's in the hands of the legislature, which must find a way to raise enough revenue to fulfill the state's obligations - particularly to its children, who don't have time to wait for the next governor to worry about them.