HARRISBURG, Pa. (AP) - Republican Gov. Tom Corbett’s re-election year budget will depend on the biggest projected increase in tax collections since he took office and will prescribe a large injection of money into public schools through a new grant program he planned to unveil on Tuesday.
Corbett, who will tout an economic turnaround, also will look to blunt rising pensions and health care costs.
Overall, Corbett will propose a $29.4 billion budget that increases spending by 3.6 percent from the current year’s approved budget, administration officials say. If enacted, it would be the biggest one-year spending increase under Corbett, who took office in 2011 during a rough fiscal stretch as post-recession revenues slumped, the federal government ended its bailout of state governments and pension obligations soared.
Corbett was to present his budget proposal for the fiscal year that starts July 1 in a joint address to the state Legislature late Tuesday morning. An emphasis on new money for education and social services continues his administration’s effort to turn around his image as a fiscal disciplinarian who balanced his first two budgets by cutting aid to schools, the poor and the disabled while reducing business taxes.
The state government for the first time is projected to break $30 billion in revenue for its main bank account that finances public schools and universities, social and human services, pensions, debt and prisons. That increase is 4 percent over the $29.1 billion expected this year, the biggest such increase in revenue since the economy began recovering from the recession in 2009.
Corbett planned to tell lawmakers in his address that the state’s economy and its fiscal outlook are turning the corner, a theme that hits on the business-friendly governor’s core message of trying to help everyone find a job.
“We’re going to talk about how three years ago it was pretty bad. What was unemployment? What was the deficit? Now, our economy is growing. Unemployment’s going down,” Corbett said in an interview Friday. “We have industry coming to Pennsylvania, looking at Pennsylvania, because of the tax climate, because of the three things I talk about: … Location, the workforce that we have and the work ethic, and energy. We have some positive things.”
Corbett’s fourth and potentially last budget proposal as governor comes amid what’s shaping up as a tough re-election fight. Corbett’s campaign, anxious to ensure that the speech hits the right notes, was paying for President George W. Bush’s former speechwriter John P. McConnell to help him craft his address.
In this budget, Corbett will propose a fourth straight year of tax cuts for businesses and a big new block grant program for public schools.
The $340 million block grant program will provide a menu of options to public schools on how they can use the money, and that menu expands for schools that performed better in the first school performance profiles that Corbett’s Department of Education released last year. The $340 million includes $240 million in new money and $100 million from the decade-old School Accountability Block Grant.
Aid to public schools for instruction and operations would remain unchanged from this year’s $5.5 billion.
Corbett hopes his forthcoming proposals to rein in pension costs and Medicaid costs will free up money to spread among a wide variety of social services, such as child care, special education and services for the elderly and disabled.
The pension proposal would postpone some immediate pension fund payments for teachers and state employees while reducing pension benefits for future public employees to cover the cost of putting off the payments. Similar legislation passed in 2010.
Corbett expects about $300 million in pensions savings - $170 million for the state, $130 for school districts - that overall would end up reducing an anticipated increase in state pension costs from $610 million.
The projected Medicaid savings is part of a proposal that has been discussed in public hearings around the state but has yet to be submitted to the federal government.