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May 8, 2012 | By | Posted in Legislature

PA Senate increases spending by $500M in budget plan

Restores proposed cuts in higher, basic ed, includes more aid for struggling districts
 
By Eric Boehm | PA Independent
 
HARRISBURG — A state Senate panel voted unanimously Tuesday to add $500 million in spending to Gov. Tom Corbett’s budget proposal.
 
The half-billion spending boost came from better-than-expected tax revenue in recent months, which has left Pennsylvania with a smaller deficit to be closed at year's end.

 
The Senate Appropriations Committee advanced the plan, which would spend $27.6 billion next year, up from the governor’s proposed $27.1 billion. An additional $550 million in tax revenue would funnel into reserves for the next budget year.
 
The proposal moves to the Senate for a final vote as early as Wednesday. If it passes, it heads to the House.
 
State Sen. Jake Corman, R-Centre, chairman of the appropriations committee, said the increases were within the revised revenue estimates, made available last week. The $550 million carryover, Corman said, will be needed as the state faces increases in pension costs and Medicaid payments.
 
Spending will grow about 2 percent over the current year.
 
I think it’s fiscally responsible, and it reflects the revenues of today,” said Corman, noting the governor’s proposal in February was made with a different set of fiscal assumptions, which changed in the spring. 
 
 
But higher-than-expected tax collections in April led the state’s Independent Fiscal Office last week to anticipate a $300 million deficit for the end of the year. That report allowed for the additional spending in this year’s budget, as well as preparation for higher costs in coming years, Corman said.
 
Democrats joined in supporting the budget and, too, pointed to cheerier revenue projections.
 
State Sen. Vincent Hughes, D-Philadelphia, minority chairman of the committee, said the governor’s original budget failed to meet residents' concerns, or the state’s fiscal reality.
 
 
Funding for higher education is the biggest change when the governor’s proposal is juxtaposed with the plan advanced Tuesday. 
 
One year after the four state-related universities — Penn State, Pittsburgh, Temple and Lincoln — took a 20 percent budget hit, Corbett proposed another 20 percent funding cut for all except Lincoln, which was flat-funded. 
 
State subsidies account for less than 10 percent of those schools’ overall budgets.
 
But the heads of the universities promised to keep tuition hikes “to a minimum,” Corman said, so the Senate committee voted Wednesday to restore the proposed cuts.
 
The university presidents during budget hearings this spring said state funding kept college affordable for more students by allowing for reduced in-state tuition.
 
 
The plan also adds $50 million to help close budget gaps at the state’s most financially troubled school districts, though senators say the number of qualifying districts has not been determined.
 
Unlike cities, which can enter an official state program for financial distress, school districts have no such indicator, meaning the final version of the state budget would have to create a formula for awarding the extra cash.
 
Democrats tried unsuccessfully to add another $250 million for various social-service programs, including cash assistance for those in need and child-care programs, which, Hughes said, would help unemployed Pennsylvanians get back to work.
 
Republicans voted away those amendments.
 
State Sen. John Blake, D-Lackawanna, said he hoped the House would take note of the Senate’s bipartisan support for a “vastly improved budget bill.”
 
But budget bipartisanship is probably an endangered idea. 
 
Though Corbett’s office House Republicans would not comment on specific line items that got increases in the Senate plan, both have held a more conservative view of government spending over the past two years, since Republicans took control of all three parts of the budget process.
 
Kevin Harley, Corbett’s spokesman, said the governor was looking forward to negotiations with the House and Senate, but the focus should be on long-term cost drivers, such as increasing pension costs and debt-service payments that go beyond a one-year budget.
 
 
Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Allegheny, said Wednesday that the House GOP is evaluating the Senate increases. 
 
If additional funding is available, House Republicans would give priority to education, including higher education, he said. 

“The key is that it has to be sustainable with the revenue,” Miskin said.

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