Corbett re-election hinges on state budget's integrity
June will be a tough month for Gov. Tom Corbett, who must have a state budget in place by month’s end, as well as a campaign plan for his re-election in November.
And June just got a little tougher. The Department of Revenue on Monday reported general fund revenue for May was $108 million below projection.
It was the sixth straight month with revenue below budget targets, amounting to a $532.5 million revenue shortfall for the fiscal year that ends June 30.
When he introduced his proposed budget in February, Corbett called for a spending increase of $306 million for education. But six straight months of below-target revenue wipe out that proposal and, in fact, the forthcoming budget might saddle local school districts with revenue cuts instead.
News reports quoted state Budget Secretary Charles Zogby saying, “If you just did a budget within the existing revenues ... you’d have no new funding for basic education, no new funding for higher education, no new funding to reduce waiting lists for those with intellectual disabilities, and we’d still probably have to go back and look at further cuts to balance.”
How much in further cuts has yet to be seen, but Zogby said at the current revenue pace the budget is still about $100 million out of balance.
Corbett isn’t changing his priorities, however, Zogby said, but fulfilling his intentions will be more difficult after a rough winter quarter that slowed the entire nation’s economic output.
That’s not good news for Butler City Schools and other districts already struggling with budget shortfalls of their own.
House and Senate caucuses began their budget meetings in earnest on Tuesday, after which their respective negotiating positions could start to solidify.
Senate Appropriations Committee Chairman Jake Corman, R-Centre County, said the majority Senate Republicans will consider three main options:
nAn austerity budget based on existing revenue only, which would likely mean spending and program cuts.
n New revenue sources, possibly from legalizing internet-based gambling, retaining a tax on business assets that is scheduled to expire this year, or raising taxes on cigarettes.
nTry to close the $100 million gap and preserve some of the proposed spending increases through a mix of targeted cuts and one-time accounting maneuvers.
Corman and other Senate GOP leaders say Corbett is leaning toward the third option: a mix of spending cuts and one-time money transfers. But the strategy is fraught with risks; accounting tricks to release dollars now could make matters much worse a year or two from now.
Prudence calls for the first option: austerity — don’t spend money that you don’t have. It’s never a popular option, and it’s especially unpopular during an election year — as Corbett’s Democratic opponent, Tom Wolf, is likely to remind us as the race for governor unfolds.
Falling revenue and budget debt do not make a good circumstance for an incumbent governor seeking re-election. Corbett must decide not only what is best for his political career but also what is best for Pennsylvania — and which of those priorities is more important.
Perhaps Corbett could find inspiration in nearby New Jersey and Ohio, where reformist GOP governors are reaping the benefits of austerity budgets imposed a few years ago. He might consider recruiting those governors — John Kasich, and Chris Chrystie, to help him sell a “stitch in time” austerity theme in his re-election campaign.
There’s very little Corbett can propose today that could be considered palatable to voters. But a straightforward plan to get through the current circumstance to a more prosperous tomorrow might be his best message to a cynical electorate — certainly better than accounting gimmicks which would, in essence, kick the proverbial can down the road another few years.
