Negotiators Agree to Budget Framework, Tax Credit
Governor Tom Corbett has repeatedly said that June 30th means something to him. With Wednesday night’s announcement that he and top Republican lawmakers have agreed to a $27.656-billion dollar budget framework, it appears that Pennsylvania is on pace to meet a second consecutive budget deadline.
Neither Corbett nor the legislative leaders were willing to discuss the details, as rank-and-file lawmakers are still being briefed on the specifics and a few details are still being finalized. However, $27.656-billion is the same spend number the state Senate used when it passed a budget bill in May.
One of the Senate’s top priorities at the time was the restoration of proposed 20% cuts to the State System of Higher Education and proposed 30% cuts to the three big state-related universities (Penn State, Pitt and Temple). The planned restorations came with a promise from those universities to keep next year’s tuition increases below the Consumer Price Index. Whether these restorations made it into the final deal has yet to be confirmed.
We do know that 40.3% of the budget is comprised of education spending and 38.9% is spent on social services. So, any movement in the spending plan – either up or down – will likely come from those two categories.
In addition to the budget framework, negotiators have confirmed agreement on an ethane tax credit that’s designed to lure a massive new petrochemical plant to western Pennsylvania. “We are investing I believe… in a new industrial revolution in Pennsylvania,” Governor Corbett said earlier on Wednesday. “We are investing in the opportunity for thousands of Pennsylvanians to have a good job.”
The American Chemistry Council estimates 10,000 construction jobs, 400 direct plant jobs in 17,000 spinoff jobs in chemical and manufacturing industries if the proposed Shell Oil petrochemical plant comes to fruition in Pennsylvania.
While Corbett was joined at the capitol by a large & diverse group of tax credit supporters, critics are wary of giving taxpayer money away to big industry. One of those critics is state Rep. Jesse White (D-Washington). He’s already proposed an alternative that would fund the incentives through a surcharge on Pennsylvania’s natural gas wells. “We should not be socializing costs while privatizing profits,” White said in a statement this week.
