State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

The other marquee items in Corbett's budget

Written by Mary Wilson, Capitol Bureau Chief | Feb 5, 2013 2:50 PM
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Gov. Corbett has made his budget address to the Legislature, proposing a 2.4 percent increase in state spending for the next fiscal year, and using the occasion to drop a few other big announcements.

He has unveiled a plan to make more money for transportation projects, which face a $3.5 billion deficit annually. Corbett said he can produce half a billion dollars in the next fiscal year by beginning to lift the cap on the wholesale gas price paid by gas stations and siphoning funds from things like driver’s license fees. All that will be combined with a 17 percent reduction in the tax paid by motorists at the pump.

“This is not a new tax, nor am I proposing to increase the rate of the existing tax,” said Corbett. “I am simply saying that the time has come to apply it to the full value of what the company is selling. It is time for oil and gas companies to pay their fair share of the costs of the infrastructure supporting their industry.”

Corbett also used his speech to announce he’ll reject a Medicaid expansion authorized under the federal Affordable Care Act.

“Without serious reforms, it would be financially unsustainable for the taxpayers, and I cannot recommend a dramatic Medicaid expansion,” he said.

Corbett’s long-awaited answer to the state’s rising pension costs is three-fold. He wants to lower the state’s payments on its pension debt, spreading out the obligation over a longer period. He’s also calling for reducing the future benefits for current state employees and putting all future state employees into the kind of 401(k)-style defined contribution plan more common in the private sector.

The governor’s proposal assumes the state will be able to realize more than $170 million in savings due to pension reforms.

“The surest way to guarantee the solvency of our pensions to make certain that our pension systems can deliver what they promised,” he said. “We can do that with very little disruption but only if we act now.
The longer we wait, the longer we wait, the more disruptive the solution will become.”

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