Analysis: Budget Season Brought Wins, Losses for Corbett

Gov. Tom Corbett delivered on his primary campaign promise June 30 when the General Assembly passed an on-time state budget with an overall reduction in spending and no broad-based tax increase. 

However, the two most-discussed, non-budget issues during the spring legislative session will remain on the table until the fall. Lawmakers and Corbett failed to reach agreements on school vouchers or a natural gas drilling impact fee during the final week of budget negotiations. 

During Thursday night’s budget signing, Corbett said work still needs to be done. 

“There are items to be completed, and it’s not over. We will continue when we come back in September. It gives us the summer to work on them,” Corbett said. 

Both major issues--vouchers and a fee or tax on natural gas drilling--have been budget bridesmaids before. 

Vouchers came close but failed three times under Gov. Tom Ridge in the late 1990s, and only one year ago, lawmakers left Harrisburg promising to return to enact a natural gas severance tax--similar in most aspects to the impact fee--in the fall. Neither issue had the momentum to carry it across the finish line. 

Will 2011 be different for either issue? 

State Rep. Tom Quigley, R-Montgomery, said the governor must take a leading role to advance the voucher bill in the fall. 

“He’s got to be driving the bus, if he wants to have it done,” Quigley said. 

Quigley was the sponsor of a bill to expand the state’s Educational Improvement Tax Credit, or EITC, program, which provides scholarships to low-income students and is funded by corporate contributions. Though the bill passed easily in the state House, it was tied to school-choice vouchers and the compromise bill failed to garner enough votes to progress in the final week of June. 

State Sen. Jeffrey Piccola, R-Dauphin, who led the charge on school-choice vouchers in the upper chamber, said it was a “lost opportunity,” but agreed that Corbett needed to take a more active role on the voucher issue in the fall. 

“I am ready, but it is clearly the responsibility of the governor if this remains on his agenda to define the parameters, initiate the process and drive that process to a successful conclusion,” Piccola said. 

When it comes to an impact fee on natural gas drilling, both chambers generally support it, though Senate leadership is leading the charge. But various issues still must be sorted out, including the structure of the levy and the distribution of the revenue. Though a number of proposals were on the table this spring, none of them built a consensus to pass this session. 

As they got ready to leave for the summer, Senate Republicans reiterated their interest in passing the impact fee. 

“Our goal is to bring a reasonable fee on this industry and one that will get to the finish line,” Senate President Joseph Scarnati, R-Jefferson, said. 

One major obstacle that derailed the impact fee push will be out of the way when lawmakers return in the fall--Corbett’s insistence on a no-tax budget and his strong desire to have the executive Marcellus Shale Commission conclude its work before agreeing to any fee structure. 

The commission will submit its report to the governor at the end of July.

Democrats pushing for the impact fee were disappointed that another budget season had passed without a tax on natural gas drilling. 

"They should be more concerned about keeping their own promises than helping Gov. Corbett keep a no-tax pledge," said state Rep. Greg Vitali, D-Delaware. "Every month we delay passing the tax is money lost that we could be (using) for environmental causes and education." 

But not everything was left undone in the 2011 budget process. The Republican majority completed a variety of agenda items that pleased social and economic conservatives, including tort reform, a change to the civil justice system which will reduce damages awarded through litigation. That legislation was at the top of the governor’s to-do list and was roundly praised by the state’s business community. 

Gene Barr, vice president of the Pennsylvania Chamber of Business and Industry, said the lawsuit reforms would encourage business investment in the state. 

“This is monumental news for job creators, consumers, doctors, hospitals and local governments,” Barr said. 

The Legislature also pleased social conservatives with an expansion of legal protections for the use of deadly force with the so-called “Castle Doctrine” law. 

Corbett’s campaign promises of increasing transparency and reforming government produced some legislative victories. A bill to create an online budget and spending database for the state made it through both chambers in the final week of June and year-old legislation to create an independent fiscal office for the purpose of certifying revenue and setting spending levels also became law. 

The fiscal office will cost $1.9 million in this year’s budget to set up and about half of that in subsequent years to operate. It is intended to balance the governor’s budget office, which controls all revenue estimates. 

Republicans also passed a series of welfare reform bills that they said would increase accountability and oversight of the state Department of Public Welfare while also eliminating fraud. Among the measures passed is an authorization for random drug testing of welfare applicants who have a prior drug felony conviction and a more complex system of eligibility verification before benefits will be provided. 

The flow of legislation continued until literally the eleventh hour of the final day of the session, with a major property-tax reform measure crossing the finish line late on Thursday night. The new law will give taxpayers greater control over local property-tax increases by limiting the ways school districts could raise property taxes. 

Asked about the issues left on the table as the Legislature headed for summer break, Corbett chose to look back instead of ahead. 

“We accomplished a great deal in the last six months,” Corbett said. “We got tort reform, we got property tax reform that is meaningful, we produced a budget that is on-time and that is reduced significantly from the budget of last year.”