March 11, 2011

Budget Highlights

As reported by the Pennsylvania Legislative Services, according to PA Budget Secretary Charles Zogby, Gov. Corbett’s proposal calls for a 3.1 percent reduction in spending, with 103 line items zeroed out. In balancing the budget he remarked spending cuts make up the “bulk of the lift.”


Notable adjustments include a return to 2008-09 spending levels for basic education funding, and roughly 50% cuts to the State System and State Related higher education lines. Correctional institutions are to receive an 11 percent increase, or $186 million.


Among the actions taken to balance the budget, Sec. Zogby said $154 million in Tobacco revenue and programs will be shifted to the General Fund, along with Moving Violation surcharges. Revised spending needs for 2010-11 and 2011-12, related mainly to updated debt service payments and the Department of Public Welfare (DPW) will offer $353 million in savings, the Budget Office estimates.


Among its “business friendly” initiatives, the 2011-12 budget proposal includes no Marcellus Shale tax, reinstates the Capital Stock and Franchise Tax phaseout, maintains a variety of tax credit programs, including the Film Tax credits, and addresses tort reform. Six Department of Community and Economic Development (DCED) business incentive programs are proposed to be consolidated into a single tool called the Liberty Loan Fund. The existing funds include the Commonwealth Financing Authority, the Pennsylvania Industrial Development Authority, the Machinery and Equipment Loan Fund, the Pennsylvania Minority Business Development Fund, the Small Business First Fund, and remaining Tobacco Settlement Fund investments.


You can read the entire budget reports here: