Last week Pennsylvania’s governor put forth his 2011-2012 budget. As most governors are doing across the country, our governor proposed some difficult spending cuts. Much has been written about his proposed plan, his lack of tax increases, and his deep educational cuts. I thought I would dig a little deeper into the plan.
Governor Corbett is the first governor in over two decades to submit a budget that was lower than the prior year. I personally find this to be refreshing. This recession has impacted everyone from large business, small business, nonprofits…government is just now feeling the effect and the need to cut back as everyone else has.
What I particularly like about this budget are the areas that our governor selected to reduce and the tone he used when communicating this message. Unlike some other states (New Jersey and Wisconsin) and their governors, ours seemed to not be looking for a fight with unions and state employees. While he did propose eliminating 1,500 state jobs, 1,000 of them are currently vacant. He did speak about a pay freeze for state employees (and additional contributions for health insurance and retirement), but in the business and nonprofit world this has already been done.
The two key areas I think are worth discussing as they have received the most press are: the 50% cut back in funding to the state schools in the System of Higher Education (and the reduction in total spending in Basic Education Funding) and the Marcellus Shale taxation.
It is being reported over and over that he is the first governor to reduce education spending and that he is making “Draconian” cuts. Some facts about reduction in education spending: Two years ago the Federal Government passed a bill called the Stimulus Bill and flooded states with cash for two years worth of programs. Everyone knew when they took the money that it would end in a few short years. But as people often do, they came to believe this was something they were entitled too. Now that the funds are cut off to Pennsylvania, should we as taxpayers keep paying it?
This current proposed budget simply takes the educational spending back to what it was pre-stimulus spending. It is the exact amount our state spent in the 2008-2009 fiscal year. Yes, the amount the schools are receiving is less than last year, but that amount was inflated with “hot money” that they never should have expected to continue.
The other key area is that regarding the Marcellus Shale taxation. Our state has been blessed with some of the world’s largest natural gas deposits. Many people claim (and the media reports) that we are NOT taxing this rich asset. The governor pointed out in his speech that we are in fact taxing them - not just extra.
The drillers are subject to Pennsylvania’s corporate taxes as well as its sales and use taxes. Land owners are subject to the Personal Income Tax on the royalties which they receive from the drillers for use of the land. We tax them just like any other taxpayer. The governor is simply asking, why should we take them more? Because we can? We desire economic growth and want to attract new industries to our state. What message does that send to future business? Come to Pennsylvania and become successful so we can tax you even more?
I do see the other side of this argument which suggests having an extraction tax which would help in creating reserves for potential future enviromental impact to the drilling areas. I am certain this issue will be debated for many years to come.
These of course, are my opinions on this proposed budget, but I value your thoughts and input. Please let me know what you think.
I agree wholeheartedly. The state MUST reduce spending and more importantly - it must abide by the limits placed upon it by the Pa Constitution.The state schools have become nothing more than pigs feeding at the public trough. Their costs are totally out of control and they squander the subsidies they receive while raising tuition every year. Its time to face reality.
Posted by: Brad A Morgan | March 16, 2011 at 09:44 PM
The Delta Cost Project, a nonprofit organization based in Washington D.C., states that there are three major reasons college costs are going up:
"Increases in spending were driven mostly by higher administration, maintenance, and student services costs. Public universities spent almost $4,000 per student per year on administration, support, and maintenance in 2006, up more than 13 percent, in real terms over 1995. And they spent another $1,200 a year on services such as
These do not translate into a better education for the majority of students."
Posted by: Brad A Morgan | March 17, 2011 at 06:00 AM
You have no idea what's going on in schools in Philadelphia. Education cuts in the city will be devastating to both the students and teachers. Less teachers, larger classroom sizes, less custodians, less administrations staff, will produce horrible results. The schools are already falling apart. But the Governor doesn't care. He doesn't have his children being taught in classrooms that are 80 degrees and with rats and mice. Don't talk about where money should go until you see first-hand what is going on.
Posted by: Jarrett Muzi | April 27, 2011 at 06:23 PM
I agree with Jarrett. Cuts should have been made elsewhere. NOT IN EDUCATION! I am a full-time student studying Secondary Education (high school teacher) and guess what? I'm maxed to the hilt already with student loans, have no where else to get the money and I'm going to be a teacher...YES, TEACHER. A teacher, most likely, in Philadelphia that makes next to nothing and the schools are falling apart, have hardly any technology and the pay is HORRIBLE! We are not only teachers but counselors, babysitters, moms (because we end up using our own salary to get supplies for the classroom that is not provided by the government AND give our own money to kids that are going unfed). And yet, cuts are being made in K-12 and in college. I can't afford a $5,000 per year tuition increase AND, I'm full-time in Summer I and Summer II and guess what? No aid has come in for my classes and I was able to scrape together enough $ for Summer I barely but don't have anything for Summer II. How am I supposed to graduate on time when this aid was promised to me at the beginning of Fall?
Posted by: Lisa | May 10, 2011 at 04:49 PM