Corbett Budget Shortchanges Schools, Retirees & PA Working Families says CLEAR Coalition

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Feb 04, 2014, 04:47 ET

HARRISBURG, Pa., Feb. 4, 2014 /PRNewswire/ -- Despite a $1 billion deficit of his own making and some of the worst new jobs numbers among the 50 states, Gov. Tom Corbett's budget proposal calls for more of the same failed policies of putting corporate interests above Pennsylvania's middle class and working families, leaders of the Coalition for Labor Engagement and Accountable Revenues (CLEAR) said today.

"The governor came into the day batting 0-3 with his first three budgets. The bad news for Pennsylvanians is that he is now 0-4. This budget proposal is nothing more than a retread of the last three failed budgets," said Kathy Jellison, President of the Service Employees International Union (SEIU) Local 668. "This governor has showered his corporate friends with $1.2 billion in tax breaks in three years and he wants middle class families and retirees to foot the bill."

Added Jellison, "His pension 'reform' proposal does not fix the debt challenge we have in our pension system. It does nothing more than hold hard-working Pennsylvanians hostage to his corporate interests. It's not fair. It's not right and lawmakers need to reject this risky proposal."

Gov. Corbett's budget would continue his massive corporate tax cuts by continuing the phase out of the Capital Stock and Franchise Tax (CSFT) tax and shortchanges public education once again. The Corbett administration promised that the budget would include significant increases in the basic education subsidy but the governor failed to deliver.

"Governor Corbett's budget proposal does not make up for the $1 billion in cuts that he has made to our schools in the past three years," said Rick Bloomingdale, President of the Pennsylvania AFL-CIO. "Every school district in the state is struggling with overcrowded classrooms and dramatic cuts to programs. More than 7 out of 10 districts have been forced to raise taxes. This budget proposal is horribly inadequate."

The governor also proposes to break the state's obligation to adequately fund its pension plans by deferring $300 million due in the next fiscal year.

"The governor has known for three years that the Commonwealth would have to meet its pension obligation to tens of thousands of teachers, nurses and other working Pennsylvanians. He chose to ignore working Pennsylvanians and instead give the money away in tax breaks to corporations," said David Fillman, Executive Director of the American Federation of State County and Municipal Employees (AFSCME) Council 13. "Where are all these jobs that the governor promised? Where's this turnaround he is touting?"

Since Corbett became governor in January 2011 Pennsylvania's rate of job growth has slipped every year and the state now ranks 48^th in new job creation, noted Wendell W. Young IV, head of UFCW Local 1776.

"Pennsylvanians get it. They know that Gov. Corbett's policies have failed miserably. When 62% of the voters say that the state is on the wrong track (F&M Poll, January 30, 2014), it's time to change course," Young said.

The CLEAR Coalition has outlined a series of common sense reforms that would increase revenue and generate significant savings by making the state operate more efficiently. These proposals include:

Maximize PLCB revenues: Consumers want expanded Sunday stores and hours and other improvements. Bottom line: $75 to $100 million
Maximize PA Lottery revenues: Allowing keno, which can be done without privatization, would deliver more between $100-200 million in new funds for senior programs in the next 12 months. Bottom line: $100 million to $200 million
Close corporate tax loopholes: Strengthening corporate addback rules could generate new revenues. Bottom line: $25 million to $300 million
Enact a fair tax on gas drillers: PA's "fee" on Marcellus shale drillers is one of the lowest in the nation. A 5% severance tax could raise an additional $400 million in 2014-15, increasing to $1 billion in additional revenue (over the current Act 13 impact fee) by 2020-21. Bottom line: $400 million
End the vendor sales tax discount: Providing big retailers a break for remitting sales taxes makes no sense. Bottom line: $40 million
Enact a smokeless tobacco tax: PA is the only state that does not tax smokeless tobacco. Bottom line: $40 million to $50 million
Internet sales tax: In wake of Supreme Court ruling on NY's "Amazon Law" PA can step up effort to collect these taxes. Bottom line: $10 million to $100 million
Medicaid Expansion: Gov. Corbett should follow the lead of Governors from both parties around the nation and expand Medicaid. Bottom line: $400 million
Enact efficiencies and maximize revenues-The CLEAR Coalition has identified almost $2 billion in savings, efficiencies and revenue enhancements that can be used to close the state's budget gap. Bottom line: almost $2 billion.