Hughes: Corbett Budget Misplaces Priorities for Spending, Cuts

A leading Democrat in the Pennsylvania state Senate says the state budget could be balanced with no new taxes and by avoiding some of the painful cuts proposed by Gov. Tom Corbett. 

In a recent interview with the Pennsylvania Independent, state Sen. Vincent Hughes, D-Philadelphia, said Corbett’s budget contained “misplaced priorities” designed to hurt working families and children. He was sharply critical of the priorities established by the administration in its first budget. 

“One of the lines they drew in the architecture of this budget was that working families and kids were going to get a whack, and businesses were going to get a tax cut,” said Hughes, minority chair of the Senate Appropriations Committee. “Our architecture would not have looked like that.” 

However, Hughes had a difficult time identifying large-scale funding initiatives able to fill an expected $5 billion deficit. He said the hole could be filled with a variety of small additions including a tax on natural gas extraction, fewer tax breaks and higher projections of revenue growth. 

At the high end, a natural gas tax would generate no more than $300 million in revenue next year. Republicans are opposed to any tax, and Corbett explicitly said natural gas is “not just something new to tax” during his budget address. 

Hughes said the governor’s budget was too conservative on expected revenues for next year and expects the state to have more robust growth after weathering the recession better than many others. He pointed to the state’s relatively low unemployment rate of 8.1 percent.

Corbett’s budget proposal anticipates revenue growth of $1.1 billion--or about 4 percent--with help from $338 million transferred from the Tobacco Settlement Fund. Earlier this month, the Federal Reserve announced a 3.9 percent anticipated rate of growth nationally for 2011. 

Hughes said a Democratic budget also would avoid a $200 million tax cut--referencing Corbett’s recent decision to adopt new rules for corporations’ tax reporting in Pennsylvania--and would not include a phase-out of the state’s capital stock and franchise tax. 

Expanding managed care for Medicaid recipients could save about $150 million, he said. Right now, the expanded program exists regionally, but not statewide. 

He said the expected budget surplus at the end of the current fiscal year also will help fill the hole. Current projections anticipate a surplus of about $500 million. 

“You start putting these other little pieces together, and then we do a line-by-line analysis, and we think we can find some stuff,” said Hughes. “But not at the expense of an environment where there’s clearly going to have to be local property tax increases.” 

During his campaign, Corbett promised to balance the state budget without raising taxes or fees. His proposal delivered by setting a proposed spending level of $27.3 billion, the combination of anticipated revenues and the expected surplus from the current year. 

“Fiscal discipline means no new spending,” said Corbett. “It’s easy to find a reason to spend. Now we have a reason to stop.” 

The budget contains significant cutbacks in multiple areas, most noticeably a 52 percent cut to state-funded higher education. 

Hughes said Democrats will fight to prevent those cuts at the state’s 14-school college system and the four major state universities, and a 10 percent cut to basic education funding for school districts. He said the governor should not view education as an expense. 

“We look at it differently. We look at it as investments, both short-term and long-term,” said Hughes. 

He suggested Republicans will join the effort to block those reductions. 

In taking aim at higher education spending recently, Corbett said the goal of state-subsidized education had not failed, since tuition rates have continued to increase. 

The full interview with state Sen. Vincent Hughes hase been published on PAIndependent.com.