Skip to content

With Budget Address Looming, Major Issues are on the Table

The state General Assembly is back and in business for its 2013-2014 session, with full committees now named and operating.  While it’s only January, more than 1,500 bills have already been filed or circulated as co-sponsorship memos, and both House and Senate have released their budget hearing schedules.

Major issues are expected to get legislative attention this spring, and virtually all have critical impacts on the state’s 2013-2014 budget and future years.

Changing the state’s current pension system has become a necessity, with a growing $40 billion unfunded liability. The state’s pension obligation is projected to grow more than $500 million each of the next three years alone.

Budget Secretary Charles Zogby said this week that the Governor will propose a new pension plan system for future state employees, and that passing the reforms he asks for in the budget address will be “inextricably linked” to public education funding. Failure to pass pension reform will severely limit funding for education programs, he said.

This week, Corbett announced his plan to privatize the state’s liquor system, and linked the plan to $1 billion in new education funding over the next four years. “It gives consumers what they want – it gives them convenience, it gives them choice,” Corbett said. Corbett’s plan would close more than 600 state-owned liquor stores and auction off up to 1,200 wine and liquor licenses to a variety of retail businesses, phasing in private sales of wine and liquor over four years.

Under the plan, people would be able to buy beer and wine at supermarkets or convenience stores. Beer distributors would be able to sell six packs and to bid on liquor licenses. Legislation has been introduced in the Senate to modernize the system rather than privatizing it.

The Corbett Administration has been working on a transportation and infrastructure plan for nearly two years, and a state commission reported recommendations on funding and improvements in August of 2011. Corbett was expected to announce his plans for transportation before the New Year, but now promises to outline that plan as part of his budget address.  It is generally accepted that a major piece of the funding will be lifting the cap on the oil company franchise tax, expected to raise about $1.85 billion in new revenue.  But many legislators have pushed back over phasing any increase in, and in many cases, opposing any increase. The Governor pledged that he would not raise new taxes when he ran for governor in 2010.

Leadership in the House have suggested that they may want to separate mass transit from other transportation initiatives, and that liquor reform and transportation funding should be linked because of the politics of the two issues.  But Senate President Pro Tempore Joe Scarnati this week said that transportation funding needs to get moved forward and not linked to any other issues.