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Tax hike likely

But Corbett wants pension cuts first

HARRISBURG — Gov. Tom Corbett acknowledged Tuesday that Pennsylvania’s budget situation is not pretty but insisted he will not listen to arguments for a tax increase until lawmakers pass major legislation slashing public employee pension costs.

A tax increase is looking increasingly likely as lawmakers eye a state budget for the soon-to-start fiscal year. The alternative — cutting programs, tapping politically sensitive grant programs or forgoing more aid for public schools and human services programs — would be a challenge to pass, said Senate Majority Leader Dominic Pileggi.

Corbett and Pileggi spoke against the backdrop of closed-door negotiations on Corbett’s $29.4 billion budget plan for the fiscal year that begins July 1. Stumbling tax collections and risky assumptions, however, have blown a nearly $2 billion hole in that plan.

Corbett, who campaigned in 2010 on a pledge not to raise taxes or fees, did not dismiss the idea of some sort of tax increase to help fill a massive hole in the state’s finances. But, he said, lawmakers must address the state’s pension obligations first in an effort to ease the long-term costs.

“It’s not a pretty picture, and we certainly don’t want that, but the first place we have to go is the cost drivers,” Corbett said.

In an effort to win passage of pension legislation, Corbett also has promised to hold up the budget past July 1 — thus blowing away another 2010 campaign pledge to sign on-time budgets.

“If we’re not able to finish by June 30, we’re not able to finish by June 30,” Corbett said.

“If we want to solve our budget crisis, we have to look at the real culprit — the billions in outsized taxpayer giveaways to corporations,” the AFL-CIO’s state president, Rick Bloomingdale, said in a statement.

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