Pennsylvania State Budget Talks

State legislators and Governor Corbett are expected to agree on a $27.7 billion general fund budget by Sunday, July 1, the first day of the state fiscal year.

The original Corbett budget totaled $27.1 billion and held spending flat relative to last year. At the request of House Republicans, the Governor agreed to raise the total after revenue estimates increased. The new draft budget is expected to increase spending by 1.5% and restore all the Governor’s cuts to state universities and a state program that funds early childhood education.

As of press time, the pending budget deal gives the Governor his proposed tax break to Shell Oil for locating a “cracking” facility in Western Pennsylvania. It takes the form of a five-cent tax reduction per gallon of ethane used by a qualifying refinery owner. The budget retains human services cuts of about 10% ($84 million) and continues a business tax cut worth nearly $300 million. No new taxes are in the budget.

The general fund budget does not include transportation, the subject of a separate appropriations bill to be debated in the fall, along with the 2011 findings of the Governor’s Transportation Funding Advisory Commission. The Governor proposes spending $810 million on highways, a reduction of $80 million (9%) from the current year. The Governor’s proposal repairs 290 bridges on the list of structurally deficient spans (down from 320 in the last budget and 442 the year before). In his February budget address, the Governor expressed a preference for handling transportation issues in a separate negotiation.

(Sources:  Pittsburgh Post-Gazette, Allentown Morning Call, Harrisburg Patriot-News, and Philadelphia Inquirer Harrisburg Bureau, web page of State Rep. Jim Ferlo (www.senatorferlo.com))

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