Corbett signs budget

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HARRISBURG -- With 13 minutes to spare, Gov. Tom Corbett signed a $27.15 billion state budget package into law late Thursday night, narrowly finishing his first spending plan by the June 30 deadline.

While the governor and the Republicans in control of both legislative chambers campaigned on reversing the last administration's pattern of budget fights dragging into the summer, it took lawmakers until the final moments to complete all of the measures that Mr. Corbett required of them.

With the spending, revenue and other budget bills headed to his desk, the governor told lawmakers that they would not be signed into law until he received a measure aimed at constraining the ability of school districts to increase property taxes.

As the midnight budget budget deadline drew near, the House finally approved that measure with a half-hour left before the Legislature was required to end session for the day. Senators promptly shepherded it to passage as time expired.

At a hastily gathered event in the Capitol rotunda, the governor thanked lawmakers before proclaiming that the budget "confronts and deals realistically with a $4.2 billion deficit."

"Make no mistake here, this budget is for Pennsylvania working families," Mr. Corbett said. "It imposes no new taxes on them," drawing applause from the GOP lawmakers behind him, "nor does it raise any new taxes on them."

The late-night bill-signing marked the first time in nine years that all of the budget legislation was passed by June 30. It also is the first time since at least 1970 that state spending will decline from the previous year.

That 4 percent reduction in state spending was the subject of months of criticism from Democrats and other opponents who said the proposal cut too deep into education and human services. Nearly every state government program will see a decrease in funding, from lucrative economic development grants to mandated welfare and corrections costs.

The property tax-hike bill that drew controversy was Mr. Corbett's answer to critics who say that $900 million worth of state funding cuts to schools will translate into higher taxes at the local level.

The legislation strengthens an existing law requiring voter approval for property tax increases that exceed inflation. Mr. Corbett has said that law is ineffective because it allows so many exemptions that districts seldom need to go to referendum.

Thursday's changes provide exceptions for district costs related to pensions and special-education services. But Senate leaders of both parties said they wanted more details on how the changes would impact debt from completed construction projects and plans for new buildings.

House Republicans said during floor debate that if the need for construction is great enough, local voters would approve the necessary tax increase.

"It doesn't stop tax increases. All it does is give the people in those school districts, the taxpayers, a little bit more of a say in the decision," said Rep. Eli Evankovich, R-Murrysville.

Rep. Greg Vitali, D-Delaware, said school directors are elected to make those decisions, and that taking the responsibility away from them erodes representative government.

"This is dangerous legislation," he said. "It impedes school districts' ability to maintain quality schools."

As Senate Republicans approved the bill, they called it "a work in progress." Noting that the new rules don't go into effect until the 2012-13 school year, those legislators said more changes could be made in the fall.

Tussling over when districts should be allowed to hike tax rates was one of several debates on education Thursday as lawmakers completed various budget-related measures.

Earlier in the day, the House, on a 109-89 vote, sent another education bill to the governor. That bill updates state law dictating how $5.35 billion in basic K-12 education dollars, as well as hundreds of millions in related funds, will be distributed to schools.

Whether that funding amounts to an increase or a decrease from the current year depended on which party was at the microphone.

Republicans defended the plan, pointing to an increase in state dollars earmarked for basic education. Democrats countered that while one line-item will increase, the combined funding that schools receive from the state will decrease for all districts.

They also complained that the funding formula unfairly favors wealthy districts while leaving the poorer ones behind.

Rep. Bill Kortz, D-McKeesport, contrasted the $80-per-student cut to the wealthy suburban school district in Upper St. Clair with the larger $886-per-student reduction for the district in Clairton several miles away.

"We are setting up the haves versus the have-nots," Mr. Kortz said.

Those on the GOP side said some of the districts with smaller cuts also rely on the state for less of their funding, meaning that property taxes provide a larger share of their school budgets.

"Be grateful that your districts are getting the money, and that your taxpayers at home aren't bearing the burden," said Rep. Kate Harper, R-Montgomery.

Concerns also were raised as lawmakers moved a welfare code bill to the governor's desk. That measure will give the Department of Public Welfare's secretary expanded powers to make cost-saving changes within the agency.

The spending plan for next year requires the department to cut about $400 million from its expenses. Republicans have pointed to a past state audit as proof that millions in waste, fraud and abuse can be eliminated from welfare programs.

But opponents criticized the changes to eligibility and services that would now be allowed, saying that it would give the welfare secretary unprecedented authority.

One of the final pieces to pass the Legislature was the fiscal code, which explains which funds will be used to pay for state programs. That measure drew attention throughout the week, as Democrats indicated that they would try to add in a fee on Marcellus shale drilling.

Momentum to include a fee in the budget bills faded on Tuesday when the governor said he would veto a drilling fee if it reached him this week. Still, Senate Democrats unsuccessfully offered such an amendment Thursday evening.

Senate President Pro Tem Joe Scarnati, R-Jefferson, who led the charge this year for assessing an impact fee on gas drillers, said he still supports crafting a shale levy, but that the conversation must be postponed until fall.

"We know this will not get to the goal line," Mr. Scarnati said.

That was a sour spot for Democrats throughout the week's budget debates.

Many of those minority members said they were disappointed to go home for the summer without passing a drilling tax or fee. Senate Minority Leader Jay Costa, D-Forest Hills, said he is concerned what may be approved in the fall will be a watered-down levy, though Mr. Scarnati pledged to work on enacting a reasonable fee.

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