Things to watch for in Gov. Tom Corbett’s budget address:
Pensions – The governor has been warning for months that he hopes to make public pension reform a priority. Democrats have warned that any attempt to modify pensions for existing employees, even by tinkering with future benefits, will be challenged in court. Due to the legal uncertainty of the strategy, it is unclear if the questions will be settled or challenges resolved in time for the final budget.
Education funding – Corbett has signaled that he hopes that license fees associated with privatizing the sale of liquor will generate $1 billion for block grants for education over the next four years. The governor has indicated that the state’s contribution to higher education will remain unchanged. He has not stated publicly what change, if any, there will be to the state basic education funding.
Transportation funding – Details provided to lawmakers by the governor’s office indicated that the keystone of his transportation plan calls for lifting the cap on the oil company franchise tax, a tax on the wholesale price of gasoline, would generate close to
$2 billion. A transportation funding advisory commission study estimated that for every dime that the wholesale price increases, the price at the pump increases 1.5 cents.
The tax is capped based on a cost of $1.25 a gallon, even though the state’s last calculation of the wholesale price of gasoline put it at $3.11 a gallon, meaning the price at the pump would increase almost 30 cents, based on the commission’s analysis.