The Tribune Democrat, Johnstown, PA

Local News

February 5, 2013

Corbett makes his spending pitch

Budget faces ‘challenging few months’



Budget highlights

Key points of Gov. Tom Corbett’s budget proposal:

• Corbett’s $28.4 billion general fund budget would increase spending by 2.4 percent over last year.

• The governor’s budget would reduce the size of the state work force by 900, including 400 layoffs. Half of the layoffs would come from closing the New Castle Youth Development center, which is scheduled to close Feb. 15. Since Corbett took office, the number of state employees has decreased by more than 2,000. In January, there were just more than 74,600 state employees.

• The cap on the oil company franchise tax would lifted in three phases over five years. Analysts have estimated that lifting this cap could result in a 20 cents a gallon increase in the cost of gas at the pump.

• To mitigate the price increase at the pump, the governor proposes to decrease the liquid fuels tax by 17 percent, or 2 cents.

• Vehicle registrations would be renewed every two years. Driver’s licenses would be renewed every six years.

• Corbett proposes to spend $1.8 billion over five years on additional transportation spending: $1.2 billion on state roads and bridges, $250 million on public transportation, $200 million on local roads and bridges, $85 million on turnpike expansion, and $80 million on “multi-modal” funding.

• The governor proposes eliminating the capital stock and franchise tax.

• Corbett would like to begin phasing down the corporate net income tax, now at 9.9 percent. The phase down would begin in 2015 and continue through 2025.

• The pension system would be reformed  so that all new hires are enrolled in a 401(k)-style defined contribution plan. Existing employees would have their already earned benefits frozen at the existing levels and their future benefits would be modified so that multipliers are reduced or the employee must contribute more.

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