By Melissa Daniels | PA Independent

HARRISBURG — The state House has the Senate’s state budget plan, but a mix of opinions portend a controversial approval process.

House Majority Leader Rep. Mike Turzai, R-Allegheny, said he sees “a lot of positives” in the plan, keeping the budget at a level that won’t lead to a tax hike while accounting for extra revenue collected this spring.

“It’s a good work product, it is under the rate of inflation and it is taking into account revenues and projections that were not in front of the governor when he did his proposal in February,” Turzai said.

The Senate’s budget plan totals more than $27.6 billion, which is $517.2 million, or 1.9 percent, more than Gov. Tom Corbett‘s budget request in February.

Turzai called the total spending amount “a ceiling,” echoing comments by Corbett earlier Wednesday.

State Rep. Daryl Metcalfe, R-Butler, said the increase leads the state in the wrong direction.

“Last year, we tried to reset some of the spending, but I think we still had a continued reset to do this year,” Metcalfe said. “We need to work to reduce spending, not pump $500 million back into the budget the governor proposed this year.”

Spending on welfare and subsidies for higher education, he said, are increases that, conversely, could be cut. Assistance to colleges and universities, he says, isn’t helping the average taxpayer.

“The more subsidies pumped into higher education, the higher the cost will be to the student, to the taxpayer,” he said.

Some members of the House GOP favor the Senate’s increase, but would rather see money go to human services, instead of higher education.

House Democrats, meanwhile,  already are expressing concern over the spending plan, including the restoration of money for education, higher education, long-term care and funding for the disabled.

“What the Senate has done today has not restored anything, quite frankly,” said state Rep. Joe Markosek, D-Allegheny. “There is not anything in here for our major, major transportation problem.”

State Rep. Bill Adolph, R-Delaware, is chairman of the House Appropriations Committee. He said the House will probably begin looking at the plan May 29.

He said any increases in spending would have to be accompanied with the appropriate funding.

“We’ve heard an awful lot about how they want to spend it, but they never come up with a plan for how,” he said.

By Eric Boehm | PA Independent

HARRISBURG — A state Senate panel voted unanimously Tuesday to add $500 million in spending to Gov. Tom Corbett’s budget proposal.

The half-billion spending boost came from better-than-expected tax revenue in recent months, which has left Pennsylvania with a smaller deficit to be closed at year’s end.

The proposal moves to the Senate for a final vote as early as Wednesday. If it passes, it heads to the House.

State Sen. Jake Corman, R-Centre, chairman of the appropriations committee, said the increases were within the revised revenue estimates, made available last week. The $550 million carryover, Corman said, will be needed as the state faces increases in pension costs and Medicaid payments.

Spending will grow about 2 percent over the current year.

“I think it’s fiscally responsible, and it reflects the revenues of today,” said Corman, noting the governor’s proposal in February was made with a different set of fiscal assumptions, which changed in the spring.

Corbett’s budget had set aside $719 million to close an expected deficit at the end of the fiscal year in June.

But higher-than-expected tax collections in April led the state’s Independent Fiscal Office last week to anticipate a $300 million deficit for the end of the year. That report allowed for the additional spending in this year’s budget, as well as preparation for higher costs in coming years, Corman said.

Democrats joined in supporting the budget and, too, pointed to cheerier revenue projections.

State Sen. Vincent Hughes, D-Philadelphia, minority chairman of the committee, said the governor’s original budget failed to meet residents’ concerns, or the state’s fiscal reality.

“Now that the dollars have come in, we have a document in front of us that better represents the dollars available,” Hughes said. “We feel this is worthy of moving the process forward.”

Funding for higher education is the biggest change when the governor’s proposal is juxtaposed with the plan advanced Tuesday.

One year after the four state-related universities — Penn State, Pittsburgh, Temple and Lincoln — took a 20 percent budget hit, Corbett proposed another 20 percent funding cut for all except Lincoln, which was flat-funded.

State subsidies account for less than 10 percent of those schools’ overall budgets.

But the heads of the universities promised to keep tuition hikes “to a minimum,” Corman said, so the Senate committee voted Wednesday to restore the proposed cuts.

The university presidents during budget hearings this spring said state funding kept college affordable for more students by allowing for reduced in-state tuition.

The average tuition increase at Penn State has been more than 8 percent annually, but the school increased tuition less than 5 percent last year, when it took a cut in state aid, according to research from the Commonwealth Foundation, a free market think tank here.

The plan also adds $50 million to help close budget gaps at the state’s most financially troubled school districts, though senators say the number of qualifying districts has not been determined.

Unlike cities, which can enter an official state program for financial distress, school districts have no such indicator, meaning the final version of the state budget would have to create a formula for awarding the extra cash.

Democrats tried unsuccessfully to add another $250 million for various social-service programs, including cash assistance for those in need and child-care programs, which, Hughes said, would help unemployed Pennsylvanians get back to work.

Republicans voted away those amendments.

State Sen. John Blake, D-Lackawanna, said he hoped the House would take note of the Senate’s bipartisan support for a “vastly improved budget bill.”

But budget bipartisanship is probably an endangered idea.

Though Corbett’s office House Republicans would not comment on specific line items that got increases in the Senate plan, both have held a more conservative view of government spending over the past two years, since Republicans took control of all three parts of the budget process.

Kevin Harley, Corbett’s spokesman, said the governor was looking forward to negotiations with the House and Senate, but the focus should be on long-term cost drivers, such as increasing pension costs and debt-service payments that go beyond a one-year budget.

“If we’re above estimate, that’s terrific, but we have to be prudent at the same time. There are many long-term expenses that are mandates that we cannot disregard,” Harley said. “What the governor is trying to do is go from a tax-and-spend mentality to a build-and-save mentality.”

Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Allegheny, said Wednesday that the House GOP is evaluating the Senate increases.

If additional funding is available, House Republicans would give priority to education, including higher education, he said.

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“The key is that it has to be sustainable with the revenue,” Miskin said.

By Gene Meyer | Kansas Reporter

FAIRWAY — Intensely debated changes to education spending may affect credit ratings for some school districts, warns a Standard & Poor’s Rating Service analyst.

Previous reductions in state aid to education and delays in school aid caused the district to deplete a $3 million reserve, or “rainy day” fund, said Sarah Smaardyk, the S&P public finance securities analyst who lowered the rating.

“We’ve seen declines in school districts’ reserves before, but this is the first one I’ve ever seen go to zero,” Smaardyk said.

But the issue has a B-side.

Easton schools, relatively speaking, weren’t asking for much, and that could have helped, said Dale Dennis, Kansas’ deputy education commissioner for finance.

The Topeka Capitol-Journal reports Gardener Edgerton’s lowered credit rating has heated up debate in the Kansas Legislature, which must decide how much to spend next year on schools. Lawmakers are scheduled to adjourn Friday.

Fiscal hawks — mostly conservative Republicans led by Kansas House Speaker Mike O’Neal, of Hutchinson — say they want to hold the line on school spending, in part to help reduce taxes and spur economic growth.

O’Neal insists many schools aren’t tapping all available financial resources. He successfully sponsored legislation in 2011, allowing schools to use unspent money for things such as bilingual education, drivers’ education, professional development and programs to fund day-to-day operations, if they so chose.

But so far, only 77 of the state’s 293 school districts have tapped those accounts, O’Neal said last week. The available funds in other districts “are growing, not shrinking,” he said.

Shortly after O’Neal’s legislation passed last year, Kansas Reporter asked  the state’s school superintendents how they would advise their boards on spending that money. Two dozen said they would recommend using it to stretch school budgets, two dozen said they would recommend leaving it untouched for bigger emergencies, and 22 said they were unsure.

Moderate Republicans, led by Senate Vice President John Vratil, of Leawood, say it would be imprudent for schools to pull money for day-to-day operations from money targeted for specific purposes.

“Too many people don’t understand the difference between dedicated funds and non-dedicated funds,” Vratil told the Capitol-Journal.

By Sean Whaley | Nevada News Bureau

 

CARSON CITY – Establishing school choice for parents and ending social promotion for students are two top priorities in Gov. Brian Sandoval’s education reform agenda for the 2013 legislative session, an administration official said today.