Governor, Legislative Leaders Agree on $27.65 Billion Budget Framework

Governor Tom Corbett and Legislative LeadersUpdate: Read a roundup of news reports with additional details about the budget at our blog, Third and State

Governor Tom Corbett and state legislative leaders announced Wednesday that they had reached agreement on the framework for a $27.65 billion state budget. The announcement followed reports earlier in the week of an expected revenue surplus in June of $100 million. (PBPC noted last week that the state's revenue outlook has improved significantly in recent months.)

The governor also announced agreement on creating a manufacturing tax credit that is part of the administration's effort to woo Shell Chemical to build an ethane cracker plant in Western Pennsylvania.

The overall budget framework is a step forward from the cut-heavy plan the governor unveiled in February. But as The Associated Press reports, it is still likely to include a 10% cut to county human services, the elimination of a modest benefit for temporarily disabled adults who are out of work, and new tax cuts for businesses.

"The newly agreed-upon spending plan appears to be nearly identical to one put forth to Corbett by lawmakers. If so, it will include no new taxes while raising spending less than 2 percent and leaving about $267 million in reserve a year from now.

Aid for public schools and 18 state-supported universities would remain flat, at least. Budget negotiators also discussed adding a $50 million zero-interest loan program for school districts nearing financial collapse and an additional $100 million in tax credits on business-sector donations to subsidize scholarships for low-income children in the state's worst-performing schools. But it was not clear whether money for those programs was included in the agreement.

Meanwhile, the plan would cut business taxes by $275 million while slashing money for county-run social services by 10 percent, or $84 million, and eliminating a $150 million cash benefit called General Assistance for temporarily disabled adults who are out of work.

The $200-a-month cash benefit, which dates back to the Great Depression, has been on Republicans' chopping block despite appeals from advocates for the poor and homeless, as well as the AARP, the United Way and religious groups representing Catholics, Methodists, Lutherans, Unitarian Universalists and Jews."

We will share more details as they become available.