Monday, January 28, 2013

Budget Secretary Calls Pension Reform Top Corbett Priority

Budget Secretary Charles Zogby Monday told the Pennsylvania Press Club the Corbett Administration’s top priority for this year’s budget will be pension reform, but quickly listed transportation funding and liquor privatization as important.
He said the budget proposal will “continue to challenge us to think differently as to how best to meet the public’s needs and deliver on the core functions of state government.”  The Governor will unveil his proposal February 5.
Asked about the Governor keeping his no-tax increase pledge, Secretary Zogby said voters made it clear in electing Corbett they did not want to see an increase in taxes on Pennsylvania families.
He said the Corbett Administration did the tough work over the last two years of ringing out efficiencies, making cuts, sifting through choices of the must-haves and the nice-to-haves, saying it was a worthwhile exercise.
“Inheriting a mess, Gov. Corbett got to work getting our state’s fiscal house in order. We clearly have today a state budget this is leaner, more agile than when we found it a couple of years ago,” said Secretary Zogby.  “There’s a lot of things that have gone away in terms of funding that, frankly, I don’t think the world has missed too much.  The sun still rises in the morning, it sets in the evening and we go about our business.
“We’re at the point that with a healthy balance sheet we begin to look at where we can make investments, where we can grow state services in a way that’s sustainable going forward.”
On specific issues prompted by questions--
-- Liquor Privatization: The Governor should address the issue in next week’s budget address.
-- Pension Reform: If pension reform is not passed and with the Governor’s pledge not to raise taxes, that means $511 million this year and $550 million next year will have to be accommodated in the budget.  He clearly said the Governor has no plans to take benefits away from current retirees. Otherwise, the Governor is looking at everything being on the table.
-- Linking Pension Reform/Education Funding: The budget address will make it clear how pension costs will affect education funding if there is no reform.
-- Lottery Contract: There probably will not be an immediate need to raise taxes if the lottery privatization contract does not move forward, but with the state’s rapidly growing senior population and increasing program costs, something will have to give.
-- Transportation Funding: Good proposals take time (on the delay in the funding plan last week). Pennsylvania has chosen to fund transportation needs through a dedicated set of financing tools (like the Oil Company Franchise Tax) and the buying power of those tools have diminished over time.  The Governor is looking for ways to address infrastructure needs in a way that modernizes the system.
-- Medicaid Expansion: The Governor has not yet made a decision on expanding Medicaid.
-- Cyber/Charter School Funding: He doesn’t see a proposal coming out of the House (inspite of the fact House Republicans proposed a plan to increase funding last week).  It will be an issue discussed during the budget deliberations next Spring.
Pension Reform Tops Governor’s Budget Priorities

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