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Deceptive budget
In our view
Gov. Tom Corbett's budget address had the feel of a warm coat on a cold day. He said he intends to hike funding for public education, transportation and social services while not raising taxes.
But as he explained how he intends to pay for these changes, it became clear that the coat was more than a bit threadbare.
There is little debate about the need to increase spending in those areas. Education has taken a nearly $1 billion hit over the past two years that has cost teachers, librarians and aides their jobs. Social services have been squeezed as the same time they have seen an explosion in the number of people in need. And fixing the state's roads and bridges -- fully 4,000 bridges in the state have been declared structurally deficient -- has been put off for far too long.
So, how would these increases be funded? By privatizing liquor sales and reforming the state's existing pension system.
Those are not minor changes.
"There's a lot of heavy lifting for the General Assembly in order to pay for this budget," state Sen. Mike Brubaker, R-Lancaster, chairman of the Senate Finance Committee, told the Pittsburgh Post-Gazette.
Heavy is the operative word. The governor has proposed selling the state store system and using the estimated $1 billion in new revenue for education block grants.
Problem is, while privatization is popular with the public, no governor has been able to get the Legislature to go along with privatization plans. Even Republicans, who control the state House, Senate and the executive mansion, are divided on the issue of full privatization.
Without full privatization, the money falls short of what is needed to fund the governor's education proposal.
And that's not the biggest obstacle in this budget. The 800-pound gorilla in the room is Corbett's desire to overhaul the state pension system.
He proposes creating a two-tier system in which most current employees would be largely unaffected under the existing defined benefit plan, but new hires would be enrolled in a defined contribution plan, such as a 401(k).
Failure to reform the pension system, he said, will likely lead to funding cuts in a host of programs, including education.
Under his proposal, the budget would use up to $177 million from the state's required pension contribution and rely on savings from reduced benefits from existing employees to achieve the funding goals.
But critics note that operating a dual pension system would be more expensive than the current one. Not just for next year but for the next decade or more.
As with the sale of the state liquor system, pension changes require legislative approval. In either case, the changes, if approved, are likely to be headed to court.
The governor's refusal, for now, to sign on to the Medicaid agreement, which would add $4 billion in federal funding, is incredibly shortsighted. It could aid as many as 500,000-plus Pennsylvanians who currently lack health coverage. What's more, Republican Gov. John Kasich of Ohio agreed to accept the Medicaid expansion after a study showed that it not only would provide health coverage to the uninsured, it also would save the state an estimated $1.4 billion from 2014 to 2022.
Corbett reminded the Legislature that now is not the time to be timid. Nor is it time to be reckless.
Said state Rep. Mike Sturla, D-Lancaster, who serves as the House Democratic Policy chairman: "This budget is predicated on three or four things (privatizing liquor sales and lottery management and pension reform, among them) which will end up in court."
And court cases of that magnitude won't be decided before the July 1 budget deadline.
Tomorrow: The transportation budget
"This budget is predicated on three or four things, which will end up in court."
State Rep. Mike Sturla
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