Capital Watch February 2013

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CA P I TA LWAT C H PA . c o m

CAPITALWATCH VOL. 6 NO. 2

INSIDE Poll says Governor doesn’t deserve re-election PAGE 4 SPECIAL PULLOUT: 2012 Guidebook to New Lawmakers PAGE 7-10 Poll: Stigma dogs people with disabilities PAGE 11 EDITORIAL: A modest proposal PAGE 12 Corbett says without ‘flexibility’ state won’t expand Medicaid PAGE 13 McCord says withholding lottery payments revolves around Keno details PAGE 14

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FEBRUARY 2013

Gov. Corbett unveils

‘big change’ budget BY PETER L. DECOURSEY, CAPITOLWIRE

Gov. Tom Corbett wants to finish off a business assets tax starting next year, hike oil company tax revenues by close to $2 billion a year over five years, and also cut the state motor fuels tax, current employee benefits, and starting in 2015, the corporate net income tax. He called it a budget of “bold” change, and said in his annual Budget Address delivered on Feb. 5: “Nobody displayed a campaign bumper sticker that read: ‘Vote for me - I want to keep Harrisburg the same.’ ... Our job isn’t to explain why things can’t be better. Our obligation is to make things better.” He also proposed the biggest budget increase of his tenure, $679 million, hiking the state’s general fund to $28.4 billion, nearing the overall state spending record of former Gov. Ed Rendell’s tenure in Corbett’s third budget. About 200 protestors again shouted at the governor’s staff as they did last year, when the staff exited a morning briefing before the governor’s budget address: “Gov. Corbett, you can’t hide, we can see your greedy side!” The governor’s budget also proposes the biggest tax revenue increase of his tenure: the lifting

Corbett’s third budget proposal since taking office focuses on education spending tied to selling state liquor store system and public pension reform.

lifted over five years, and partially offset by two 1-cent per gallon reductions of the state motor fuels tax in each of the next two years. That two-cent reduction will cost about $110 million a year, officials estimated. The plan would also devote about $40 million per year in driving fees or fines to mass transit, with the bulk of those funds going to SEPTA, the transit agency in southeastern

“Now is not the time to be timid in our approach. Now is not the time to cling to old ideas and the status quo. Now is not the time to make small changes and expect big results.” - Gov. Tom Corbett of the $1.25 per gallon oil company franchise tax, so that levy will be applied to the whole price of wholesale gas, more than double the current cap. That cap will be

Pennsylvania. Starting at $40 million year one, over five years, that would rise to $250 million annually, PennDOT Secretary Barry Schoch said.

The cap-lifting is proposed to take place this year, two years from now and four years from now, in equal thirds. That plan has been attacked by Americans for Tax Reform, the group who no-new-net-tax pledge Corbett signed as a candidate for governor in 2010, as a tax hike. Corbett said: “This is not a new tax, nor am I proposing to increase the rate of the existing tax. I am simply saying 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 cost of the infrastructure supporting their industry.” Corbett hailed his education spending as a record high, but public school advocates said they were disappointed that after two years of no increase in the nonpension basic education subsidy, that line item went up only $90 million. Early education rose by $11 million in the education bud-

get, and an almost equal sum will be needed to supplement this year’s early intervention program spending, Zogby said. The budget also contains an additional $13.5 million for the state’s Children’s Health Insurance Program (CHIP), to enroll 9,300 uninsured children and $7.1 million to add about 1,400 children to the Child Care Works program. It also marks the first time that Corbett has proposed $100 million Education Block Grant which the Legislature has wrangled him into funding the last two budgets. That program is proposed for the same funding it ultimately got the last two years. Pennsylvania Partnerships for Children President and CEO Joan Benso said: “Budgets are ultimately about priorities, and with this budget, the governor rightfully recognizes that Pennsylvania’s 2.7 million chilcontinued on page 3

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