Governor’s Budget Moves PA in Wrong Direction

Sharon Ward |

Governor Tom Corbett delivered his 2012-13 budget address to a joint session of the state Legislature today. We are still working on our budget analysis at the Pennsylvania Budget and Policy Center.

In the meantime, check out our op-ed (see link below) on the governor’s budget originally published in the Allentown Morning Call.

Gov. Corbett’s Budget Moves State in Wrong Direction
By Sharon Ward

Too often in this economy we dwell on the bad news, but Pennsylvania has good news to tell, as well.

Our citizens enjoy a level of personal income that is higher than citizens in most states, and we have maintained lower unemployment rates throughout the recession. We have higher rates of health care coverage than many states. And when it comes to spending and taxes, our state experience is one of restraint.

Much of our success is because of Pennsylvania’s long-term commitment over the last decade to preparing our young people for the changing economy, spurring private investment in cities and towns and becoming a national leader in clean energy. We have done so, while not forgetting our grandparents, our children, and those who are most vulnerable.

Governor Tom Corbett’s policies are moving in the opposite direction.

Last year, the governor declared war on Pennsylvania colleges and universities, and the new budget continues that battle with additional cuts. Silicon Valley in California and the Research Triangle in North Carolina are centers of innovation spun from public universities. The new Pennsylvania budget will cut off that innovation while driving up college tuition when many families can least afford it.

In his first year, Gov. Corbett made deep cuts to public schools that hit the poorest school districts the hardest. The results are felt across the Commonwealth.

Seven out of 10 schools statewide have increased class sizes. Teachers in the Chester Upland schools in southeastern Pennsylvania are working without pay. Students in Allentown are spending time in study hall when they should be taking advanced math classes that could help prepare them for careers in technology or engineering.

The governor took pains to shift blame for school funding cuts to the loss of federal recovery act dollars. Yet the governor fully restored lost federal funds from the corrections budget. That was his choice—prisons over schools. The budget is silent on aid to school districts that are in distress because of state funding cuts. Ignoring this problem will only allow it to fester.

The Corbett administration has chosen to make savings by reducing or eliminating health care for children and adults. Last year, 40,000 working Pennsylvanians lost health coverage, and last fall, 88,000 fewer children received health care coverage. This is not cutting waste; it is taking health care from those who need it.

The budget now proposes to eliminate assistance for low-income adults who are sick. This will affect 67,000 Pennsylvanians, including about 1,600 in Lehigh and Northampton Counties. With the economy starting to show signs of improvement, this is no time to be pulling the rug out from under seniors, children, and families hit hard by the recession.

As Gov. Corbett said in his budget address, we have to make choices in a tough economy. The governor, unfortunately, has made choices that reduce investment in higher education and our schools, especially those that serve the poorest kids. He has made a choice not to provide health care for needy children.

The governor claims Pennsylvania is open for business and wants to continue a billion dollars in tax breaks to big profitable corporations that haven’t created a billion dollars worth of jobs. He points out that state funds kept a General Electric plant from closing in Erie. In 2010, GE had $5.1 billion in U.S. profits but paid zero dollars in federal taxes.

Why are we giving GE money and cutting children’s health care? The governor continues to turn a blind eye to companies that dodge state taxes, a luxury we can no longer afford and one that few states tolerate anymore.

Have these tax cuts created jobs? Not at all. In fact, the state’s economy created fewer jobs last year than in 2010. About 13,000 teachers and school support staff lost their jobs thanks to cuts resulting from these expensive tax breaks.

There is a better way. We need to take bold steps to rebuild the economy—not continue Gov. Corbett’s tactics of cutting taxes for businesses that don’t produce jobs. We need to take a balanced approach that looks for efficiency while also looking for opportunities to raise revenue.

The governor’s budget does take steps to limit a sales tax subsidy for big retailers and to step up enforcement of tax laws. Pennsylvania should go further, closing corporate tax loopholes and putting an end to tax breaks for profitable corporations that have failed to boost our economy. Policymakers missed a great opportunity to enact a Marcellus Shale drilling fee that pays for drilling-related costs and contributes to economic growth throughout the Commonwealth.

We have new opportunities in 2012 to put Pennsylvania on a better course to economic recovery and continue the good news of recent decades. But it’s up to our elected leaders to seize this opportunity. Our state’s economy and well-being depend on it.

Sharon Ward is director of the Pennsylvania Budget and Policy Center in Harrisburg.