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Corbett faces tax shortfall

Severe cuts are possible

HARRISBURG — It became clear late last year that Gov. Tom Corbett’s administration would need to be creative if it were to produce an election-year budget plan that scrounged up more money for key constituencies, including public schools, and afforded a new round of business tax cuts.

It did. The plan released in February assumed a rosy economic outlook and called for moves like delaying $570 million in payments for pension obligations and health care services.

Since then, Pennsylvania has experienced the worst collapse of tax collections since the Great Recession. Now, Corbett, a Republican running for a second term, is under pressure to sign off on another tax increase, something he pledged not to do when he ran for office.

For now, Corbett has not publicly agreed to any plan to fill the budget gap with a tax increase. But his aides also have not ruled it out.

“I don’t know if we’re going to get there, and it’s not really something we’ve discussed,” said Charles Zogby, Corbett’s budget secretary.

Zogby, however, is blunt that if more money isn’t found somehow, then there will be no new money for the agenda Corbett spent much of the spring touting: new public school grants and college scholarships, shorter waiting lists for human services.

“The current revenue picture would suggest that none of those would be done, and indeed we’re going to need to go back into the budget and make real cuts if there is no desire to look at alternatives to fill in the shortfall,” he said.

As if to underscore how discombobulating the situation is, lawmakers are getting the latest start on budget legislation in at least a decade. The new fiscal year begins July 1.

The problem is this: Tax collections are about $600 million behind expectations. That’s a shortfall tantamount to $1.2 billion in Corbett’s original $29.4 billion budget proposal because it reduces next year’s revenue projection by a dollar-for-dollar amount.

The governor’s office gave leaders of the Legislature’s Republican majorities — Democrats are being ignored by the administration — a look at how it would fill the gap with across-the-board spending cuts and cash transfers.

Some of those raids could be politically sensitive, hitting programs that typically aid volunteer fire companies, parks, libraries, museums and historic sites.

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