He almost missed his deadline, but Pennsylvania Gov. Tom Corbett got the on-time budget he wanted. Corbett, ending a frenetic Thursday with lawmakers, signed the state's $27.15 billion spending plan around 11:45 p.m.
The governor, who had already secured budget approval from the legislature, held out for one more concession and got it when lawmakers passed a bill calling for a referendum on any school district property tax increase that exceeds the inflation rate.
Earlier Thursday, Gov. Lincoln Chafee signed Rhode Island’s $7.7 billion budget. Pennsylvania's and Rhode Island's new fiscal years begin Friday.
Pennsylvania's budget cuts overall government spending by 4.1%, or $1.2 billion, and marks the first time since 2002 that the state enacted its spending plan on time.
The House on Wednesday night had passed the budget by a 109-to-92 vote, one day after the Senate ratified it. The House focused on what the state should do with a surplus that could reach $700 million.
Corbett, when taking office in January, said the state faced a $4 billion shortfall.
The Republicans, who control both legislative chambers and the governor’s office, wanted the money held in reserve, while the Democrats fought to have educational cuts restored.
Public schools are in store for about $860 million of cuts and universities face a 20% cut.
“Look, there are cuts, we know,” said Rep. Mario Scavallo, R-Mount Pocono. “But if we don’t get in line, next year we’ll be up here with more problems.”
Rep. Douglas Reichley, R-Emmaus, said Pennsylvania had used federal stimulus money “like grain alcohol” to avoid tough decisions.
He also criticized the eight-year tenure of Corbett’s predecessor, Democrat Ed Rendell. “The Bobby McFerrin approach of 'Don’t worry, be happy,’ led us to the position we are in now,” Reichley said.
Democrats worried that state cuts could trigger rises in local property taxes. “There are many short-sighted cuts that we will pay for many times over later on,” said Rep. Phyllis Mundy, D-Kingston.
Several Democrats also said the failure by the House to pass a tax on Marcellus Shale natural-gas drilling cost the state needed revenue. Corbett opposed any such measures this year.
His own advisory panel on Marcellus Shale drilling is expected to announce its findings in July.
Pennsylvania is rated Aa1 by Moody’s Investors Service, AA by Standard & Poor’s, and AA-plus by Fitch Ratings.
Rhode Island’s budget closes an initial deficit of $300 million through cuts to some programs previously paid for with federal stimulus funds and state department consolidations, as well as a small surplus and higher-than-expected revenues from the previous year.
The lawmakers added several items subject to the 7% sales tax: pre-written computer software delivered electronically, insurance proceeds, nonprescription medicine, and sightseeing package tours. It also ended refunds of sales tax that some eligible companies get on construction materials through the Economic Development Corp. and the Industrial Facilities Corp.
“The Senate achieved many of its goals as this budget evolved, including reducing out-year deficits, repaying the rainy-day fund, and fully funding the new school aid formula. The budget also restructures how we will finance transportation and enacts reforms to bring our unemployment insurance system back to solvency,” said Senate Finance Chairman Daniel Da Ponte, D-East Providence.
The budget knocked out $6.7 million in aid for struggling Central Falls that Chafee had sought. The city has been under receivership since May 2010.
All three major rating agencies rate the state double-A.
