Friday, July 25, 2014





Corbett signs budget, takes on lawmakers, pensions


July 10. 2014 11:41PM
By Marc Levy and Mark Scolforo Associated Press

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Local legislators react. Page 5A



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HARRISBURG — Gov. Tom Corbett signed the state budget 10 days late on Thursday and used his line-item veto power to spotlight what he called the Legislature’s failure to sacrifice with the rest of government or to curb rising public-sector pension costs that are fueling school tax increases.


Corbett, a Republican who is running for re-election but down in polls to Democrat Tom Wolf, delivered the news in a lively, campaign-style speech that recounted his accomplishments and took on lawmakers and public-sector labor unions.


He said he wanted to avoid any more school property tax increases to cover pension obligations, and criticized the GOP-controlled Legislature for refusing to contribute any of its approximately $150 million six-month operating reserve to help state government close a massive deficit.


Criticism from lawmakers was bipartisan, and accentuated Corbett’s chilly relationship with Republicans and solid opposition by Democrats.


Overall, Corbett struck $65 million from the Legislature’s own appropriations and another $7.2 million in earmarks and other spending items picked by lawmakers, noting that the proposal sent to him last week increased the General Assembly’s own $320 million budget by 2 percent.


“They filled the budget with discretionary spending and then refused to deal with the biggest fiscal challenge facing Pennsylvania, our unsustainable public pension system,” Corbett told reporters.


Overall, the $29 billion budget Corbett signed Thursday does not increase state taxes while authorizing $871 million in new spending, largely for public schools, prisons, pension obligations, health care for the poor and social safety-net programs.


To plug the deficit, it relies on more than $2.5 billion in one-time stopgaps, the biggest use of stopgaps outside of the three years around the Great Recession.


The main appropriations bill passed without a single vote from a Democrat.


The $72 million spending reduction, plus freezing an unspecified number of earmarks that the governor had yet to reveal Thursday, was necessary to ensure a balanced budget, administration officials said.


The pension systems for public school and state government employees represent a growing financial strain on budgets, but despite pressure from Corbett over the past couple of years, no deal has made it to his desk.


He said lawmakers left Harrisburg for the summer “with unfinished business. They need to come back and enact pension reform.”


Lawmakers made no immediate indication of how they would respond to the line-item vetoes, or whether they would move up planned return dates of Aug. 4 for the House and Sept. 15 for the Senate.


He accused unions of blocking the progress of a pension system overhaul he had thrown his support behind in February, although elements of it were variously opposed later by Democrats and Republicans.


Democrats protested that it was an attempt to scapegoat teachers and other government workers by slashing future pension benefits, while conservatives objected to postponing more legally obligated pension payments.


In the end, a leading bill backed by Corbett would not have meant any immediate or substantial savings for the state or school district budgets, and it lacked enough support to pass either chamber.


Critics also pointed out that a 2010 law already reduced future pension benefits and postponed some pension payments.


Forcing the Legislature to drain half its reserve to make up for his line-item vetoes would leave it with a three-month operating reserve. The Legislature manages it in secret and has created no special rules to limit its size or use.


“That is such an important item for them, they can take that money from this huge reserve,” Corbett said. “You know, Pennsylvania doesn’t have a reserve, we don’t have a rainy day fund, but the Legislature does?”


Democrats quickly counterattacked, accusing Corbett of lacking leadership skills and mishandling the state’s finances while pursuing school funding cuts that they say accelerated school property tax hikes.


“Tom Corbett made this mess,” House Minority Leader Frank Dermody, D-Allegheny, said. “He owns it.”




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