On February 5, Governor Corbett unveiled his $28.4 billion budget proposal for 2013-2014. Although his plan offers modest increases in social services, in reality, these inadequate investments would come at the expense of good, middle class jobs for our Commonwealth. The Governor is proposing to sell off Pennsylvania’s wine and spirit stores, relinquishing a revenue-generating asset for Pennsylvania’s taxpayers and threatening thousands of family-sustaining jobs. The Governor is also attacking retirement security for tens of thousands of working Pennsylvanians by proposing to replace State employees’ hard earned pensions with insecure, inadequate savings accounts. At its core, this budget is a clear reflection of Corbett administration’s continued priorities of favoring corporate interests over the needs of working families.
Healthcare & Human Services
Although a number of human services see modest increases including CHIP funding, mental health services and long term care, these gains are minimized by Corbett’s indicated refusal to accept expanded Medicaid funding under the Affordable Care Act. By doing so, Corbett would refuse billions of dollars in federal funding that could cover up to 800,000 uninsured Pennsylvanians free of cost for the first three years and then costing just 10% in following years.
Education
Corbett’s “Passport for Learning,” which offers schools $1 billion block grant depends on the successful passage of a liquor privatization plan. And although basic education funding is increased by $90 million, funding levels are still millions less than where they were when he took office. In fact, the budget locks in 85% of the classroom funding cuts that have been enacted over the past two years.
Additionally, the budget maintains cuts to higher education in effect since 2011-12, which continues to put college out of reach for a growing number of our state’s brightest minds.
Transportation
The budget plan provides much-needed funding increasing in transportation infrastructure, funded largely through by removing an artificial price cap on the oil franchise tax.
Pension Overhaul
Corbett’s budget proposal would move new state and school employees into a separate retirement system similar to a 401(k) which he argues would save $175 million in the next fiscal year alone and without which additional cuts would be needed else where. However this proposal requires legislative support and court approval, both of which will be hard to secure.
Tax Breaks & Loopholes
The budget includes major new business tax breaks, including a complete phase out of the capital stock and franchise tax in 2014 which generated more than $1 billion in state revenue for the state in 2007-08. The new budget fails to close the Delaware Tax Loophole or enact a fair severance tax on Marcellus Shale drilling.