Governor Corbett Releases 2013 State Budget and Welcomes New Gas Drilling Bill

On February 7, 2012, Governor Tom Corbett presented his proposed budget for the 2013 state fiscal year, which begins on July 1, 2012. Addressing a joint session of the state House and Senate, the Governor stated that his General Fund budget was “lean and demanding,” as it attempts to close a projected revenue shortfall of $700 million.

(The Governor’s budget speech was immediately preceded by State Senate passage of a bill that would overhaul natural gas drilling regulations and assess an impact fee on wells that would be tied to market prices. The next day, after a House-Senate conference, the House passed the bill and sent it to the Governor, who is expected to sign it. Highlights of House Bill 1950 are available here).

In summary, the Governor’s:

• General Fund Budget totals $27.14 billion, down .1% ($20 million) from last year.

• Operating Budget, which includes the General Fund, lottery, and federal and other support, is $63.3 billion, the same as last year.

• Capital Budget is $1.2 billion. This separate pool, supported mostly by bond funds, is dedicated to construction and repair of highways, bridges, buildings, and flood protection projects. The total is down from last year’s $2.1 billion mainly due to lower amounts being allocated for PennDOT projects.

Highlights of the 2012-2013 budget are available here.

The new budget emphasizes job training and business growth. It imposes additional cuts to higher education and holds to current spending levels for corrections, economic development, and most other programs. It continues the phase-out of the Capital Stock and Franchise Tax, and transfers support for various K-12 education and public welfare programs to block grants. The Governor continues to prioritize police and emergency response functions, adding funding for new state troopers and increasing funding for storm disaster relief. While some medical assistance programs are cut by 10%, others such as long-term managed care are increased.

The Governor’s budget proposal is a first step. You may wish to help shape the final budget that will be passed by the General Assembly in the next six months. Leech Tishman’s Government Relations Practice Group can help your business or organization navigate the budget process through its legislative experience and its relationships with lawmakers on both sides of the aisle.

Please feel free to contact any member of our Government Relations team if you would like to discuss a government strategy or project in support of your business or organization.

For in-depth information regarding the 2013 budget, including the Budget in Brief, Line-Item Appropriations and a Slide Presentation, please click here.

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