Pa. a half-billion dollars short this year

HARRISBURG - Just six months into the fiscal year, Pennsylvania is already facing a half-billion-dollar shortfall, and Corbett administration officials say they only expect that number to increase going forward.

That was the bad budget news delivered Tuesday at a midyear budget briefing by Budget Secretary Charles Zogby.

Zogby said a major culprit was a lackluster economy that has lead to weak tax collections. He also blamed rising health-care and pension costs.

As a result, Gov. Corbett is asking for a freeze in some state spending, although Zogby would not give any details as to what that would mean to specific programs or departments.

"I am hoping this picture gets better," the budget secretary said, "but I can't balance this budget on wishes."

This current fiscal year's $27.15 billion spending plan did not raise taxes, but it cut spending by 3 percent, with deep cuts in aid to schools and colleges, as well as millions from social-service programs that provide job training, health care, shelter, food, and counseling to the state's poorest citizens.

Next year's budget will be no easier, said Zogby, adding that the state faces $800 million in mandatory spending increases on debt service and pension payments, among other things.

"All of the easy things, the low-hanging fruit, has been picked," he said. "It is not going to be without pain."

Zogby did say that the administration is not considering tax increases in the new fiscal year, which begins July 1. That would allow Corbett to say he is continuing to make good on the no-new-tax pledge he made during his campaign.

When asked Monday whether the governor would try to prioritize funding for specific areas, like public schools, Zogby would give no detail.

"The governor makes those decisions," he said, adding: "At this point, everything is on the table."

Through Nov. 30, collections for the state's main bank account, called the general fund, totaled $9.4 billion, which was $345.3 million, or 3.6 percent, below estimate, according to the state Department of Revenue.

Democrats in the legislature, who were also briefed Tuesday, were quick to pounce on the midyear forecast.

They maintain that the Corbett administration, together with Republicans who control both legislative chambers, have focused on an "extreme right-wing agenda" at the expense of creating jobs and spurring economic development.

They also took Republicans to task for closing yet another year without a tax or fee on the extraction of natural gas from the Marcellus Shale.

Republicans in the House and Senate have been wrangling for months over how much - and how - to impose a so-called local impact fee on the state's Shale drillers. Despite high-level talks, there has been no resolution, and the issue now appears headed to a legislative conference committee. That is where measures can go when the two chambers cannot agree on the best way to tackle an issue.

Sen. Vincent Hughes (D., Philadelphia), the ranking Democrat on the Senate Appropriations Committee, called the failure to reach agreement on an impact fee "an embarrassment."

And Senate Minority Leader Jay Costa (D., Allegheny) added that the administration has not even turned its attention to the state's transportation funding crisis. A Corbett advisory commission report this summer recommended a number of ways to close Pennsylvania's $3.5 billion transportation funding gap, but the governor said in the fall that the time wasn't right to deal with the issue.

"There has been a failure in leadership," Costa charged Tuesday.

Corbett is expected to give his budget address in February.