Before the holidays, Gov. Tom Corbett is expected to deliver his mid-fiscal year budget update.
Citing a November report by the Independent Fiscal Office that the commonwealth faces a projected structural budget deficit of $839 million, Senate Democrats Tuesday unveiled a savings and investment plan.
Senate Minority Leader Jay Costa (D-Allegheny) says they’ve identified ten areas that would lead to more than $1 billion in savings and revenues that can be used to make key investments in “job growth, education “strengthening our social safety net and providing for long-term sustainability of Pennsylvania businesses and the families which those businesses employ."
Sen. Vincent Hughes (D-Philadelphia) says 40 percent of the suggested savings would come from signing up for Medicaid expansion.
“We can reject, if you will, ‘Corbett Care,’ his Healthy PA program and adopt the Medicaid expansion program that we have laid out that would save the state over $400 million and provide a broad-based health care program,” Hughes said.
However, Corbett is trying to obtain the additional federal dollars through Medicaid expansion but with some conditions. The governor wants to use the Medicaid expansion funds to subsidize people buying individual plans and not as Corbett said earlier put “500 thousand more people into an entitlement program.”
If the federal government accepts the proposed conditions by Corbett, then much of the savings cited by the Senate Democrats might not exist.
The Democratic plan also counts on $125 million in savings from modernizing the State Store system; 85 million by reforming charter school funding; and, $50 million from Managed Medicaid Care.
While not calling for a broad-based tax increase, the Senate Democrats want to freeze the phase out of the Capital Stock and Franchise tax—generating another $75 million, another $36 million from higher tobacco taxes, and $55 million from more efficient tax collection.
Sen. Anthony Williams (D-Philadelphia) says Pennsylvanians should not accept claims from the Corbett administration that they have to make budget cuts due to a revenue shortfall.
“For the last three years, Senate Democrats have put forth plans outlining how we can generate budget savings and additional revenues to make key investments without severe cuts,” Williams said.
Last week Corbett’s Secretary of Revenue Daniel Meuser reported that revenues collected through the first five months of this fiscal year were 0.4 percent above estimates.