Corbett, lawmakers announce budget agreement
Posted: Thursday, June 21, 2012 5:30 am
HARRISBURG, Pa. (AP) — An agreement on a nearly $27.7 billion budget deal announced Wednesday evening by Gov. Tom Corbett and top Republican lawmakers appears to be nearly identical to what lawmakers had proposed several weeks earlier, a plan that would cut taxes for businesses while squeezing programs for the poor and disabled.
It also includes a meeting of the minds on legislation to create a tax credit sought by Corbett in his pursuit of bringing an integrated petrochemical industry to Pennsylvania, anchored by a multibillion-dollar refinery planned in the Pittsburgh area by a subsidiary of Netherlands-based oil and gas giant Royal Dutch Shell PLC.
The agreement for the fiscal year beginning July 1 puts the state on course for a second straight on-time budget. It comes after two weeks of almost-daily talks behind closed doors and at a time when schools are making plans to lay off thousands of employees, in part because of deep cuts in state aid this year. Corbett, a Republican who took office last year after campaigning on a pledge not to raise taxes, and the others would not give details about their new agreement until rank-and-file lawmakers are briefed in the coming days.
"We have agreement among ourselves on many, many areas," Corbett told reporters gathered in his Capitol conference room. "There are still some other areas we need to work out."
Leaders of the House and Senate Republican majorities stood at Corbett's sides but largely stayed silent during the briefing. The budget, which typically involves the passage of a couple dozen pieces of legislation, will still require approval by the full House and Senate to go into effect.
Democrats were not invited to the talks, and not one single Democratic lawmaker voted for the budget currently in force, which was Corbett's first as governor.
The newly agreed-upon spending plan appears to be nearly identical to one put forth to Corbett by lawmakers. If so, it will include no new taxes while raising spending less than 2 percent and leaving about $267 million in reserve a year from now.
Aid for public schools and 18 state-supported universities would remain flat, at least. Budget negotiators also discussed adding a $50 million zero-interest loan program for school districts nearing financial collapse and an additional $100 million in tax credits on business-sector donations to subsidize scholarships for low-income children in the state's worst-performing schools. But it was not clear whether money for those programs was included in the agreement.
Meanwhile, the plan would cut business taxes by $275 million while slashing money for county-run social services by 10 percent, or $84 million, and eliminating a $150 million cash benefit called General Assistance for temporarily disabled adults who are out of work.
The $200-a-month cash benefit, which dates back to the Great Depression, has been on Republicans' chopping block despite appeals from advocates for the poor and homeless, as well as the AARP, the United Way and religious groups representing Catholics, Methodists, Lutherans, Unitarian Universalists and Jews.
Corbett proposed a $27.1 billion hold-the-line plan in February that nonetheless included deep cuts in aid for education and social services while cutting business taxes and spending more on health care and public employee pension costs.
But tax collections began to brighten after that, and Republican lawmakers used the newly available cash in their alternative plan to add hundreds of millions of dollars to the subsidies that Corbett had proposed for universities, public schools, county-run social services, the race horse industry, medical research, retailers and hospitals and nursing homes that care for the poor.
The Democratic minority in the House of Representatives sought unsuccessfully earlier this month to win a vote for $300 million in additional spending that it insisted the state would collect in taxes and bashed the GOP agenda as needlessly painful for schools and people who depend on social services.
8 comments:
Corbett boasts support for Pa. refinery tax credit
June 21, 2012
HARRISBURG, Pa. (AP) — Gov. Tom Corbett on Wednesday demonstrated that he has deep support from labor unions and business advocacy groups behind him as he presses state lawmakers to approve what is thought to be the largest taxpayer-paid financial incentives package in Pennsylvania history for what he says would be the biggest industrial investment in the state in a generation.
He appeared at a Capitol news conference with several dozen union and business group representatives, as well as lawmakers from both parties, in a show of support for his proposal for a $1.7 billion tax break designed to lure an integrated petrochemical industry to a state wracked by the flight of manufacturing jobs in recent decades.
Corbett faces lawmakers uneasy over the appearance of an industry giveaway and possibly a suspicious public at a time that his administration is pressing for a second straight year of tax cuts for businesses and cuts in aid for education and social services.
"For the general public, that might be hard to understand because ... they think we're giving money to them," Corbett told a news conference. "No, we're not. What we're saying is, 'You build it. You provide all these jobs for all these people and we'll take a little bit less money from you so that we have more money for us.'"
Conservatives have expressed discomfort with the kind of tax break they have opposed in the past, and liberals are angry over this latest idea for a taxpayer subsidy after accusing Republicans of giving the booming natural gas industry a pass on paying their fair share of taxes.
Asked whether he believes enough votes will emerge in the Legislature, Corbett, a pro-business Republican who is viewed as an ally of the natural gas industry, singled out a handful of Democratic lawmakers who stood on stage with him.
"With some friends from the other side of the aisle here, I think the support will be there," he replied.
Still, Corbett suggested that lawmakers will want to change the amount he has has proposed — a maximum of $66 million a year for 25 years beginning in 2017.
The plan is in response to the tentative commitment by a subsidiary of Netherlands-based oil and gas giant Royal Dutch Shell PLC to build a multibillion-dollar petrochemical refinery in the southwestern Pennsylvania town of Monaca, about 30 miles northwest of Pittsburgh.
Such a refinery would be the first on the East Coast, and would be fed by the "wet gas" drilled out of Appalachia's bountiful Marcellus Shale formation, which is thought of as the nation's largest-known natural gas reservoir. While Shell has said little about the tax credit publicly, an executive, Daniel Carlson, was in the Capitol on Wednesday for meetings.
Details of the tax credit started to become public in recent days as Corbett began to press the Republican-controlled Legislature to approve it before the end of June. With less than two weeks until they leave Harrisburg for the summer, lawmakers are still trying to get a better grasp on the details of the proposal.
Corbett called the opportunity to secure such a project a once-in-a-lifetime chance to usher in "a new industrial revolution in Pennsylvania" that could employ thousands of people. The tax credit is designed to try to get a chemical manufacturing industry to come with Shell, as well as possibly other companies willing to spend billions of dollars to build other refineries.
"When I was a young man, 25,000 souls worked in the mills (in Johnstown), high-paying jobs," said Sen. John Wozniak, D-Cambria. "The city was filled with stores, department stores, restaurants. I can tell you right now, if you never experienced the loss of manufacturing jobs, you have no idea of its impact. This is an opportunity to bring manufacturing back to Pennsylvania. For those that lived in Beaver County, Pittsburgh, Johnstown, Bethlehem, they know the importance of these manufacturing jobs."
Shell's so-called ethane cracker would convert natural gas liquids to ethylene, which chemical manufacturers can then use to produce chemicals that go into everything from plastics to tires to antifreeze.
Shell views the tax credit as a way to help ensure that ethane is abundant and affordable for the life of the refinery, which it says could extend for three or more decades. The worry is that natural gas producers would be more inclined to pipe the ethane from the Marcellus Shale field to Gulf Coast refineries, Shell said in a June 12 letter to lawmakers.
The proposed tax credit is calibrated at that level to be offset by new tax collections the industry would generate from the economic activity and jobs it adds to the state, administration officials say.
At a nickel per gallon of ethane purchased and used in manufacturing ethylene in Pennsylvania, the tax credit would be proportional to the industry's activity and the resulting collections of new taxes on things like sales and income, Revenue Secretary Daniel Meuser has said.
The site of the Shell plant also would be located in a tax-free zone created for it, although Corbett administration officials won't say what they believe the value of that would be to Shell.
"Democrats were not invited to the talks, and not one single Democratic lawmaker voted for the budget currently in force, which was Corbett's first as governor."
Now that's what I call bipartisanship and working together.
Why is it that when some people say 'working together' it either means nothing or the exact opposite???
Come on they're hurtin', Shell needs the welfare!
Thanks to Higher Oil Prices, Shell First Quarter Profits Rise Over 15 Percent To $7 Billion
By Rebecca Leber on Apr 26, 2012 at 11:53 am
The Shell oil spill off the coast of Nigeria
Royal Dutch Shell’s profits rose 15.9 percent in the first quarter of 2012, netting $7.3 billion. Shell’s CEO Peter Voser attributed the increase in part to “strong oil prices,” which rose to over $100 a barrel this quarter.
In 2011, Shell’s profits soared 54 percent to $3.5 million every hour, despite producing 3 percent less oil. This time, it produced 4 percent more than Q1 in 2011.
A few facts about Shell:
Shell posted $7.3 billion in profits for quarter one, or $80.2 million per day.
It is the second-largest lobbyist in oil and gas, lobbying $14.6 million in 2011. This is up from 10 million in 2009 and 2010.
Shell reported 63 operational oil spills in 2011, double the number from 2010. This is due to a spill in Nigeria, which Amnesty International alleges is 60 times worse than Shell originally claimed.
Shell has more than $10 billion in cash reserves as of January 2012.
Shell CEO Peter Voser’s compensation more than doubled in 2011 to $15.3 million. His salary increased (in euros) by 113 percent. Even though oil production dropped 3 percent.
The company plans to drill in the Arctic Ocean, spending more than $4 billion over five years in “its quest to exploit the vast oil and natural gas resources believed to lie beneath the Beaufort and Chukchi Seas off the north coast of Alaska,” according to the New York Times.
It's called 'privatizing the profits, socializing the losses'.
From today's Phila. Inquirer.
Any Pa. budget deal remains under wraps
By Angela Couloumbis
Inquirer Harrisburg Bureau
HARRISBURG - There may be a deal on the state budget's bottom line, but its details are still being worked out behind closed doors.
More than a day has come and gone since Gov. Corbett and Republican legislative leaders announced they had agreed to spend $27.65 billion in the fiscal year that begins July 1. They have yet to lay out the particulars, saying negotiators still had to work out hard and fast numbers.
But on Thursday, a few of those numbers emerged. There was heartening news for colleges and kindergartens, bad news for temporarily disabled people on general assistance, and money for an initiative on school choice.
The four state-related universities, which include Temple and Penn State, will get back most of the 30 percent cut Corbett proposed, GOP legislators said. Also getting most of their funding back will be the 14 colleges in the State System of Higher Education, which stood to see aid dwindle by 20 percent.
There will also be funding for the block grants that school districts use to pay for all-day kindergarten and other early-childhood programs. Corbett had proposed ending those, but it appears most, if not all, of the $100 million for the program will be restored.
More dollars will go to the Educational Improvement Tax Credit (EITC). Corbett and legislative leaders want to lift to $100 million the $75 million cap on the program, which gives tax breaks to businesses that provide scholarship aid to low- to middle-income students.
Legislators also appear to be in agreement with Corbett on creating a similar pot of money under the EITC umbrella of $50 million or more. It would target pupils in the worst-performing schools, a concept similar to that of the school voucher bill that Corbett wanted but did not garner enough support in the House.
One reason the latest proposal may be easier to sell: The money consists of tax credits, and unlike vouchers, wouldn't redirect school aid.
"This would take no money out of existing line items for public schools," noted Rep. Mike Vereb (R., Montgomery), adding that the measure had bipartisan support.
The same cannot be said for all of the budget - indeed, the only negotiators at the table have been Corbett and fellow Republicans who control the House and Senate. Democrats have lamented an array of cuts in welfare programs but don't have the votes to stop them.
Negotiators hope to affix numbers to most major items by Friday. Regardless, there will be a mad rush next week for both chambers to move the budget and related bills to Corbett's desk by the June 30 deadline.
If they succeed, it would mark Corbett's second on-time budget, a feat never achieved in eight years by Democratic predecessor Ed Rendell.
One item unlikely to survive, despite protests from church groups and advocates for the poor, is the so-called general assistance program that provides cash benefits to nearly 70,000 temporarily disabled adults. Corbett proposed eliminating the funding, and legislative leaders did not seek to restore it.
Brenda Freeman of West Philadelphia, who has peripheral edema, which swells tissues in her arms and legs, said that program had been "my only income." Freeman, 38, whose condition makes it very difficult to stand or sit for long periods and who telephoned The Inquirer to protest the cut, said: "What am I going to have to do - eat out of a trash can?"
"There still is a chance to do something," she said. "I'm hoping that they do the right thing."
http://www.youtube.com/watch?v=sZrgxHvNNUc
There will also be funding for the block grants that school districts use to pay for all-day kindergarten and other early-childhood programs. Corbett had proposed ending those, but it appears most, if not all, of the $100 million for the program will be restored.
Post a Comment