Governor Corbett Signs Budget, Cutting Spending, Without Tax Increases

8/6/2019 Governor Corbett Signs Budget, Cutting Spending, Without Tax Increases

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News for Immediate Release

June 30, 2011

Governor Corbett Signs Budget, Cutting Spending, Without Tax Increases

Harrisburg Gov. Tom Corbett today signed the 2011-12 budget which cutsgovernment spending, does not raise taxes, includes property tax reform, andrestores common sense to the state spending process.

The $27.15 billion budget cuts overall government spending by more than $1billion.

This reality-based budget marks a return to the Constitutional principles that mustguide Pennsylvanias fiscal policy, Corbett said. It spends no more than we haveand it doesnt pretend we have more than what we have budgeted.

I was elected last November to change the culture of state government and thatmeans not only must government be honest, it must be fiscally responsible, Corbett said. The Senate and House join my administration in making thesestandards a reality.

The legislature also agreed to a key economic proposal for school districts areferendum on any property tax increase that exceeds the rate of inflation, knownas Act 1. Under these changes, any property tax increase above the rate of inflationmust be approved by the local voters. Taxpayers in each district will be empoweredto decide whether they want a property tax increase to fund a particular program.

This puts taxing and funding decisions where they belong - in the hands of thevoters who are footing the bill, Corbett said. Who knows better how to spendmoney in our communities than the citizens who live there?

Pennsylvania taxpayers are reclaiming the budget process, not just for today, butfor years to come, Corbett said. Together, we have built a solid framework forfuture budgets.

The budget is part of a larger Corbett administration initiative that also includes tortreform - signed into law on June 28 - which reforms how damages are recovered incivil lawsuits, ensuring an equitable framework for litigation in the future andimproving Pennsylvanias business climate.

Highlights of the 2011-12 budget include:


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State spending is cut by 4.1 percent, or $1.17 billion, from 2010-11.

The enacted budget eliminates 66 appropriation line items, cutting $822million in annual spending. It reduces funding for more than 226appropriations and consolidates an additional 52 items, to streamlinegovernment.

Administrative spending is reduced by 4 percent and more than 1,000positions in state government are eliminated. These reductions are achievedin large part by consolidating programs, targeting inefficiencies and reducingor eliminating discretionary financial grants, commonly known as WalkingAround Money, or WAMs.

This marks the start of a commitment to reduce the cost of running stategovernment by 10 percent over the next four years. It is a change in theculture of taxing and spending that has caused the states economy todecline.

No budget is worth the trouble if it doesnt do something to grow the economy andcreate jobs, Corbett said. The budget is here to serve the people not the otherway around. This budget gets things in the right order and takes another steptoward clearing away the tangle and overgrowth of government.

This budget consolidates and streamlines economic development programs tofocus on job creation and attracting businesses to Pennsylvania. In spite of the many difficult choices, this remains a pro-growth budget, built on the

proven theory that lower taxes stimulate investment and jobs. The budget honors Corbetts commitment to reinstate the phase-out of the

Capital Stock and Franchise Tax. That tax was levied on goods andequipment that a company kept in store, even though it had not been sold orput to use. By eliminating this regressive tax, the governor has given morethan 100,000 job creators an estimated $70 million in tax relief. The phase-out of this tax will continue until it is completely eliminated in 2014.

At the same time, the budget has maintained important tax credit programs.These are the Job Creation and Film Production tax credits. The budget alsoincreases the Research and Development Tax Credits from $40 million to $55million.

The budget brings state tax policy into line with the federal tax code. Itincreases the bonus depreciation deduction to 100 percent for propertyplaced into service before January 2012. This gives businesses room toexpand and raises the potential for a surge in purchases for Pennsylvaniabusinesses.


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State government has a solemn duty to provide for public safety, Corbett said. If the state is a ship, public safety is the hull and we cannot cut there, only spendwisely. This budget spends wisely and will make Pennsylvanians and their childrensafer.

It maintains funding for Pennsylvanias public safety programs, including anincrease in total funding for the Department of Corrections and the Board of Probation and Parole. It also provides funding for the Pennsylvania StatePolice to maintain troopers on our highways and in our communities, as wellas the states emergency management agency.

The budget supports our military and veterans programs, keeping ournations promise to those who served to defend us.

The most vulnerable Pennsylvanians our children are well protected in thisbudget, Corbett said. It also targets waste and fraud so that the truly deservingare no longer cheated by those who game the system.

This budget increases total funding by $6.2 million for the Childrens HealthInsurance Program, provides $405 million for childrens Early InterventionServices and $1.4 billion in county child welfare services.

In the area of long-term living, the budget provides $4.6 billion for home andcommunity-based services and nursing home care for persons withdisabilities and older Pennsylvanians.

The budget includes $262.3 million in total funds to provide prescription drugcoverage for 360,185 older Pennsylvanians, an increase of 1,950 people.

This budget includes $5.4 billion for Basic Education. It is part of a larger effort tomake education not only accessible, but more flexible as we strive to improvestudent performance. This budget is based on my firm belief that the order of priorities is child-parent-teacher, Corbett said.

Basic education funding has been increased $128 million from Corbettsoriginal proposal, which was at the 2008-09 pre-federal stimulus level. Thisresults in an average annual increase of 3 percent in funding over the past10 years.

The budget provides nearly $1.7 billion in total funds for higher educationprograms, including $381 million in the Pennsylvania Higher EducationAssistance Agency for the Grants to Students program for students seekingfinancial assistance for higher education opportunities.


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The enacted budget also includes $7.1 million in new funding to continueEducational Assistance Program tuition grants for members of thePennsylvania National Guard enrolled at degree-granting colleges.

Corbett praised those teachers, administrators and other school employees in asmall number of school districts across the state who followed his suggestion toforego pay raises, in an effort to help their communities control local finances inthis difficult economy.

They serve as stellar examples of the shared sacrifice we all need to make torestore our state to fiscal stability, Corbett said.

This budget - built on fiscal discipline and effective government - supports freeenterprise and job creation, Corbett said. Its a step toward making Pennsylvaniaa national leader among states in economic success once again.

To review the budget in its entirety, visit www.budget.state.pa.us

Media contact : Kevin Harley, 717-783-1116

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Governor Corbett Signs Budget, Cutting Spending, Without Tax Increases