Governor Tom Corbett Announces 2011-2012 Budget

Pennsylvania Governor Tom Corbett’s 2011-2012 budget cuts about $850 million in spending, a 3% reduction.  "The substance of this budget is built on four core principles: Fiscal discipline, limited government, free enterprise and reform," he said during today’s address.

Although the governor kept last year’s promise of no state tax or fee raises, he eliminated funding for 103 budget lines, reduced funding for over 150 appropriations and consolidated 55 others.  Experts say that the cuts will most likely result in local tax increases, as entities such as schools and municipalities seek to cover operating costs without layoffs or service reductions.

State Worker Cuts

• Eliminated about 1,000 vacant state jobs and laid off about 500 state workers
• Froze state workers’ pay for the 2011-12 year
• Ordered school districts to freeze pay for all employees even if it means re-opening collective bargaining agreements
  

Education Cuts

• Cut funding in half, by about $625 million, to the 14 universities in the State System of Higher Education, including Penn State, University of Pittsburgh, Temple and Lincoln
• Cut basic education spending by $550 million, including $260 million in grants given to school districts to pay for Pre-K, kindergarten, and class-size reduction
• Cut state support to teachers who receive higher education degrees
• Introduced legislation to allow school districts to fire teachers for economic reasons without regard to seniority and to provide school choice options to low-income students

Spending Increases

• Increased prison spending by $186 million, bringing back the 2,100-plus inmates temporarily housed in Virginia and Michigan
• Increased funding to state police by about 3.4 %, training an additional 230 troopers with two cadet classes in 2011-12

Other Revenue Sources

• Leased oil and gas rights on state forestland for $65 million to help keep state parks open

Business Credits

• Continued the phase-out of the Capital Stock and Franchise Tax, expected to be  eliminated by 2014, which will provide $70 million in tax relief to the business community
• Increased the Research and Development Tax Credit to $55 million
• Held funding steady for the Film Production Tax at $60 million$10.1 million  for the Job Creation Tax Credit
  $10 million for small businesses and entrepreneurial assistance through the Discovered in PA, Developed in PA program.
  $14.6 million for the Ben Franklin Technology Development Authority, which helps develop state technological industries
  
• $25 million for the Pennsylvania First program, which will give out grants  for job creation