In his budget address Tuesday, Pennsylvania Gov. Tom Corbett devoted much of his time to four topics bound to affect the daily lives of millions of Pennsylvanians – education funding, raising tariffs on wholesale gas, pension reform and the expansion of Medicare – and outlined how these changes, if enacted, would be for the better.
In terms of education, Corbett pledged to add billions of dollars to the education sector, even as Corbett said that under his administration, the state has invested more in public education than at any point in its history.
“It is true that we no longer have one-time federal ‘stimulus’ dollars -- money that should never have been put toward school operating costs. Yet once again this year, we will be putting a record amount of state funding into basic education, $5.5 billion dollars, starting with early childhood programs and going all the way through grade 12,” Corbett said in his address. “Pennsylvania currently spends more than $348 million dollars each year in early childhood programs. My budget reaffirms that commitment. I propose adding another $6.4 million dollars toward our Pre-K Counts and the Head Start Supplemental Assistance programs. This money gives an additional 3,200 children, and their families, access to quality full and part-day programs as well as summer kindergarten readiness programs.
“As we lay this foundation, we must also continue to expand funding for K-through-12 education,” Corbett continued. “This budget adds nearly $100 million dollars to be distributed to our school districts. That is over and above last year’s record funding levels.” This is in addition to Corbett’s $1 billion “Passport for Learning” block grant, which will be broken down into four sections.
“One is called ‘Ready by 3.’ The funds can go toward supporting and enhancing a quality kindergarten program that meets our academic standards and enhances elementary reading and mathematics through third grade. The second program acknowledges that every child learns differently at his or her own pace. When it comes to education one size does not fit all. Schools can establish customized learning plans that allow our students to learn at the pace and manner that best suits them,” Corbett said. “Science, technology, engineering and math remain critical to the continued advancement of our students, our state and our nation. That is why they comprise the third area to receive a share of this new revenue. The grant will provide funding to invest in programs and equipment that support science and math in grades six through twelve.”
Corbett said the fourth portion of the grant will go toward improving safety at public schools.
The American Federation of Teachers PA assailed Corbett’s plan as one that masks the cuts to education Corbett previously made, and accuses the governor of purposely misinforming the public.
“After two years and $1.25 billion in cuts to basic, special and higher education, the governor’s budget continues the cuts and offers false choices and empty promises that won’t stabilize school finances, improve educational opportunities or build an educated and competitive workforce,” said AFT PA Executive Vice President Rosemary Boland. “At a time when Pennsylvania needs sustainable education funding, Corbett offers little new funding and a small restricted block grant in exchange for acquiescing to his agenda of privatizing public employee pensions and selling the state’s liquor stores for private profit. A fire sale of liquor licenses and defunding school and state employee pensions are no way to finance world-class schools and colleges.
“We can afford to restore education budget cuts by making responsible choices – by closing tax loopholes, repealing corporate tax breaks and enacting a fair and competitive tax on natural gas extraction,” Boland added. “After two years of crushing reductions, it’s reprehensible that the administration continues putting privatization ahead of children and schools.”
Boland was referring to Corbett’s controversial multi-pronged approach to gas tariffs, one that would lower the at-the-pump liquid fuels tax by 17 percent while asking the state’s legislature to begin a five-year phase out of the capped tax oil and gas companies pay to the state. Those taxes, Corbett said, where initialized when the prevailing thought throughout the industry was that gas would never rise above $1.25 per gallon.
While Boland agreed with Corbett’s plan on the gas tax, many others were put off by the governor’s plan to follow through on the privatization of the state-operated liquor stores. While Corbett has said monies form the sales of such operation would go toward public education, although Corbett didn’t specify how much money would go to education.
“This latest scheme from the Governor is another example of his Administration's reluctance to commit to an education funding plan, one that takes into account accurate student data, recognizes student and district differences, and provides funding to address student needs in a transparent formula that everyone - from state legislators to local taxpayers - can see," said Education Law Center Executive Director Rhonda Brownstein. “We wanted to see how other states calculate and distribute this precious resource — education dollars — and where Pennsylvania stands," said Brownstein. “Turns out, Pennsylvania has abandoned basic budgeting practices that most states, including our neighbors, are putting to use in order to calculate and distribute state education dollars accurately, fairly, and transparently.
“We urge the Governor and the General Assembly to adopt an education funding formula that follows these common practices of accuracy, fairness, and transparency. Anything less puts the education of Pennsylvania's students at the whim of one-time payouts and political schemes."
In his address, Corbett also pledged to maintain the current level of state aid - $1.58 billion – to the state-run universities. Corbett didn’t address the contract impasse between the Pennsylvania State System of Higher Education and its biggest union, the Association of Pennsylvania State College and University Facilities.
Corbett vowed to protect the pensions of state workers and reiterated that he will not cut any benefits to retirees; his pension reform plan, Corbett said, would provide roughly $140 million in savings that will go directly to the school districts throughout the state.
“What we need to do, going forward from this time, is to create a new 401(k)-style retirement benefit for our future employees consistent with the retirement packages currently enjoyed almost universally by private sector employees,” Corbett said. “My plan also suggests some adjustment in the way future benefits are calculated for current employees in order to maintain the solvency of our pension system and guarantee all current and future employees a worry-free retirement.”
Boland didn’t agree with Corbett’s math in terms of pension reform, saying that, in the long run, Corbett’s plan will create many more problems that it could potentially solve.
“Corbett’s pension ‘reform’ proposal is short-term thinking that creates long-term problems for teachers, librarians, nurses and other school and state employees, and, ultimately, for Pennsylvania taxpayers. The governor’s plan will not reduce any of the systems’ current $41 billion unfunded liability. In fact, it may increase the amount needed down the road to meet its obligations to retired and current workers,” Boland said. “Further, the governor has provided no details on the amount employers, school districts and the state, will contribute to the 401(k)-type plans, leaving to the imagination potential costs and potential savings.
“Teachers and other school and state employees didn’t cause the pension problem, but under the governor’s proposal current and future state employees will pay for the mistakes that others made with significantly reduced pensions.
“Teachers and school employees accept significant changes to their pensions in 2010 when the legislature passed bipartisan pension reform,” Boland added. “Act 120 is designed to do what everyone agrees needs to be done: restore healthy fund balances gradually so that the state’s pension funds will be able to meet their obligations to retirees – as they have done for the past 100 years. If Act 120 is allowed to work, it will strengthen and build a healthy pension system and provide secure and stable pensions for another 100 years.
“Corbett’s plan, on the other hand, will kick the pension funds problems down the road, leaving retirees poorer and taxpayers footing a larger bill in the future…his pension reform isn’t helping taxpayers, retirees or current employees. He should let Act 120 work.”
Corbett did win praise for his refusal to expand Medicare, going as far as to say that President Barack Obama was correct when Obama said that simply increasing the rolls will not led to a more stable system. Corbett still managed a shot at the Affordable Health Care Act, commonly referred to as “Obamacare.” States do have the choice of opting out of the program.
“We cannot afford to expand a broken system. Right now, without expansion, the cost to maintain our current Department of Public Welfare programs will increase by $400 million dollars. The main driver in that cost increase is Medicaid and long-term care.
Washington is asking us to expand Medicaid as part of the Affordable Care Act without any clear guidance or reasonable assurances,” Corbett said. “The federal government must authorize real flexibility and innovative reforms that empower us to make the program work for Pennsylvania.
“We also should not permit the federal government to take away millions of dollars from our hospitals as leverage to implement their one-size-fits-all policies,” Corbett continued. “At this time, without serious reforms, it would be financially unsustainable for the taxpayers, and I cannot recommend a dramatic Medicaid expansion.”
This battle continued to take a partisan tone, as Americans for Prosperity Pennsylvania State Director Jennifer Stefano backed up Corbett’s stance on Medicare.
“I applaud the Governor’s decision to join the list of states choosing not to expand the Medicaid program,” Stefano said. “I call on our state legislators to do the same. Those enrolled in Medicaid have worse health outcomes than patients that have no health insurance at all.”