Building upon the fiscal responsibility of last year’s budget, the General Assembly passed the 2012-13 budget. The Governor approved the budget which went into effect July 1st. Unlike the previous administration, Governor Corbett managed to deliver two consecutive balanced budgets on time. The spending plan demonstrates a commitment to taxpayers, free enterprise, students and the state’s most needy.
The $27.66 billion framework is a modest increase; only two percent above last year’s budget. The increase is sustainable as the Independent Fiscal Office projects stronger revenues than previous estimates. The spending level also adheres to the Taxpayer Protection Act, ensuring the growth of government does not exceed inflation and population growth.
True to his word, the Governor has once again held steadfast to his no tax pledge. Policymakers did not raise taxes, but actually cut taxes. There is a continued effort to phase out the Capital Stock and Franchise Tax which has contributed to the commonwealth’s dismal business climate. The plan also eliminates the inheritance tax for family farms, strengthening agriculture’s future within the state.
The approved proposal provides increased funding over last year for early and basic education. While state universities were prepared to receive cuts in Corbett’s budget address back in February, healthy revenue collections permitted restorations. The university system will receive level funding in exchange for maintaining tuition increases at a rate lower than inflation.
The budget also provides for the expansion of Pennsylvania’s successful Educational Improvement Tax Credit program. This program allows businesses to donate to scholarship organizations in exchange for a tax credit. Opportunity scholarships are then given to income-qualified families so that parents may send their children to the school of their choice. The expansion reserves scholarships for students attending the most underperforming and violent schools in the state. This program offers students a lifeline to obtain a better education at the fraction of the cost to taxpayers. The promising program already boasts a $500 million a year savings to school budgets.
Stronger revenue collections have also allowed for restorations in human services for the needy. Additional funding has been provided for people with intellectual disabilities and those in nursing homes and hospitals. Foster children will also receive support until the age of 21. The budget also incorporates a Human Services Block Grant that allows for participating counties to decide for themselves how best to allocate their funding. The block grant is designed to increase efficiency and reduce red tape.
While it is impossible for interests to obtain every desired line item, the approved plan demonstrates a balanced approach that meets the commonwealth’s many top priorities. While this timely budget adequately addresses the immediate fiscal year, the attention must be focused on skyrocketing costs in pensions, debt and welfare. Failure to enact meaningful reforms will quickly consume more and more tax dollars. With only limited resources, these expenditures threaten to crowd out all other spending, creating a budgetary crisis. The budget is a definite starting point in achieving a fiscally sound future for Pennsylvanians.