Corbett to freeze spending, projects shortfall

Corbett to freeze spending, projects shortfall

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Posted: Tuesday, December 20, 2011 12:24 pm

Associated Press | 1 comment

HARRISBURG, Pa. (AP) — Gov. Tom Corbett's top budget adviser on Tuesday warned that Pennsylvania's tax collections will continue to suffer from economic weakness and said he is developing a plan to freeze some state spending to ease a shortfall that he expects will reach at least $500 million by the end of the fiscal year in six months.

Budget Secretary Charles Zogby would not give details about the kind or amount of spending that could be frozen, but said he expects Corbett, a Republican, to act by the end of December on a set of options given to him by Zogby.

He also warned of another painful budget for the 2012-13 fiscal year beginning July 1 in which Corbett would balance spending without raising taxes. But the state will have to find a way to pay for a projected $1 billion in growing health care, pension and debt costs, Zogby said.

"We want to make very clear that these are very difficult times, with very difficult choices in front of us," Zogby told reporters in a traditional mid-year budget briefing in the Capitol.

Zogby said while many thought the current budget was difficult to balance, he said that "in many respects, 2012-13 is going to be an even more difficult challenge."

The current $27.2 billion budget for the 2011-12 fiscal year made deep cuts to education aid, held the line on human services costs despite rising demand for services, and did not raise taxes to cope with a drop in state revenues and the loss of federal stimulus money. It cut spending by 3 percent, lowered business taxes and carried $1 billion over into the new fiscal year.

Other than saying that tax increases are not under consideration, Zogby would not reveal what the Corbett administration will propose in the governor's February budget plan for the 2012-13 fiscal year.

Through Nov. 30, collections for the state's main bank account, called the general fund, totaled $9.4 billion, which was $345.3 million, or 3.6 percent, below estimate, according to the state Department of Revenue.