Proposal includes Senate Bill 2, Sen. Browne’s pension reform measure
Governor Tom Corbett unveiled his $28.4 billion state General Fund budget for Fiscal Year 2013-14 on Tuesday (February 5) before a joint session of the General Assembly. The state Senate will now carefully study the governor’s proposal, according to Senator Pat Browne.
The Governor’s budget proposal includes a $679 million (2.4 percent) increase in spending from the current fiscal year without increasing income taxes. The increased spending would be covered primarily by a projected current fiscal year revenue surplus of $232 million and revenue growth of 1.5 percent ($429 million) in the next fiscal year.
“The state budget is one of our most powerful tools for economic development and economic recovery. I am pleased to see that the efforts of the past two years are paying off through the incurring of a surplus and the projection of growth next year,” Senator Browne said. “However, we can’t stop there. We must continue to look at every program and department line-by-line to see where we can reduce costs or increase efficiencies.”
During his budget address, the Governor detailed his public pension reform proposals, which he estimates would result in a $177 million reduction of the projected $511 million increase in costs in the next fiscal year.
The Governor is proposing that all new employees would be covered by a defined contribution program, a move that Senator Browne has introduced as legislation on several occasions, most recently as Senate Bill 2 for the current session.
“When we compare state benefits to private sector benefits, it is evident that the private-sector is seeking predictability in the funding of their benefits and pursuing cost reductions on a regular basis. Without significant changes in the design of Pennsylvania’s pension system, including a switch to a defined contribution system, the costs associated with the pension system in the long-run will be unaffordable to Pennsylvania taxpayers,” Senator Browne said. “Over the past few decades, the private sector has shifted to defined contribution plans. In addition, the federal government had made a similar change. It is time for Pennsylvania to do the same.”
The Governor proposes a $90 million increase ($5.49 billion) in funding for local school districts and maintains the $100 million Accountability Block Grant program. Nearly $11.5 million in new money is allocated for early childhood education, a move strongly supported by Senator Browne, who serves as co-chair of the bi-cameral, bi-partisan Early Childhood Education Caucus.
The new money for early childhood education would be allocated:
- $5 million for early intervention ($222 million total);
- $4.5 million increase for Pre-K Counts ($87.3 million);
- $1.9 million increase for Head Start ($39.1 million).
“Investing in early childhood education not only improves the lives of those who need help most, but provides savings to taxpayers in other areas. It helps at-risk children become productive members of the community,” Senator Browne said. “Early childhood education is a worthy preventative medicine that will improve the health of our communities.”
Special education ($1.026 billion) and community college funding ($212 million) are maintained at current levels. The budget also maintains funding for state and state-related universities at current levels. In return for $1.58 billion in funding to higher education, university leaders have pledged to work to keep tuition increases as low as possible for their students.
Other notable items proposed in the Governor’s budget include:
- $17.4 million in new money for economic development and job creation efforts.
- A $13.5 million increase in funding for the Children’s Health Insurance Program (CHIP).
- $20 million to provide home and community-based services for approximately 1,200 Pennsylvania adults with intellectual disabilities.
- Funding for three new classes of cadets for the Pennsylvania State Police — a total of 290 new cadets — plus the hiring of 90 civilian police dispatchers.
The Senate’s review of the budget will formally begin on February 19 with three weeks of hearings conducted by the Senate Appropriations Committee. The state’s current fiscal year ends on June 30.