For those just tuning in, Steve Esack has a very good update article on where things stand with the Republican budget right now:
In February, Corbett proposed an additional 3.5 percent in spending for a total of $29.4 billion for the fiscal year starting July 1. A lot of that extra money would have gone to public schools via Corbett’s new Ready to Learn grant.
But Corbett’s budget proposal did not carry tax increases to fund the extra spending. It was built on rosy revenue projections and numerous one-time revenue sources.
His budget proposal then blew up when revenues came in short and the state got hit with unforeseen costs. This year’s deficit stands at $537 million and next year’s is estimated at $870 million — for a cumulative shortfall of $1.4 billion. And the state has not made up revenue it has lost over the last three years after Corbett ushered through business tax cuts.
What that means is that if Republicans don’t want to break their promise to restore some of their education cuts (and by the way, this restores none of their cuts to basic education), they need to find some money.
But a large number of Republicans, Corbett included, have signed a No Tax Pledge promising Americans for Tax Reform head honcho Grover Norquist they won’t raise taxes. Grover Norquist already thinks they broke that pledge with the transportation funding bill and the fracking impact fee, but Republicans disagree, and they want to avoid angering him more, and further depress anti-tax conservative voters.
So where do they get the money? They aren’t going to rescind the business tax cuts that are driving their budget deficit or accept the federal Medicaid expansion money, so their big ideas are limited to underfunding pensions some more, passing a weird liquor reform bill that doesn’t actually sell the state stores, and then maybe caving on a severance tax on natural gas production.
Here’s the fun part: Corbett is setting this up so that his cave-in on the severance tax is conditional on underfunding pensions and the liquor plan, and neither of those things are going to happen.
Democrats aren’t going to help them on pension underfunding or the liquor plan, because they don’t support either one, and this is an election year. So the administration is stuck looking for votes solely from Republicans, and the whip count isn’t adding up.
About three dozen think the pension underfunding plan is fiscally irresponsible (it is) and there’s also a contingent of social conservatives and protectionists in the state Senate who don’t support the proposed alcohol market reforms.
I could be wrong of course, but I’m betting neither of these things pass. So what happens then? Does Corbett cave on the severance tax anyway, even though neither of his conditions were met? And even then, where does the rest of the money come from?
I’m going to go ahead and predict that Corbett breaks the education funding promise and self-derps his way into another round of painful budget cuts in an election year. Grab the popcorn – this thing’s about to start getting good.