What Should State Do With Increased Income?

Pennsylvania’s tax revenue is currently more than $500 million dollars above expectations. Governor Corbett wants to put the extra money into a reserve fund, and push forward with his plan to cut about a billion dollars from last year’s budget. He’s insisted over and over again that “27.3 [billion] is the number,” and he won’t go a cent higher.

But as the surplus continues to grow, Senate Republicans may not support that plan, according to spokesman Erik Arneson. “It is certainly difficult for many members of our caucus to understand why ..putting [the surplus money] in a reserve fund is a better approach than restoring some of the budget cuts that were proposed,” he said. “At this point, with what we know, without having an independent fiscal office in place to share that publically, we believe that you can very responsibly spend some or all of that unexpected revenue surplus to help reduce the impact of the budget cuts.”

The $500 million could keep the basic education subsidy provided to school districts level, or restore the bulk of proposed cuts to State System and state-related colleges and universities.

House Republican leaders will introduce their budget next week, and hope to pass the measure by the end of the month. It will spend Corbett’s preferred number, $27.3 billion dollars. The House plan will shrink the size of proposed education cuts, and take about $500 million out of Department of Public Welfare spending.