June 5, 2014

House GOP Preparing Bare-Bones Budget, Including Cuts To EITC Tax Credit, Horse Racing Fund Transfers

The Morning Call reported Thursday House Republicans are putting together a “bare-bones” $28.6 billion General Fund budget which would eliminate hopes of increasing funding to support elementary and secondary education.
The bare-bones option would also not assume any potential savings from adoption of pension reform measures or any revenue from a tax increase or any new taxes.
The House GOP background budget document, which the Morning Call said is not a budget plan, includes these recommendations it said came from Gov. Corbett--
— Five percent cuts in all state departments — with the exception of reductions to basic education, special education, preschools, state-funded universities and the state's college loan program.
— Taking $227 million in excess money from six grant and loan programs designed to help volunteer fire companies, local law enforcement and businesses.
— Saving $31 million by eliminating or reducing four tax credit programs that promote employment, historical preservation, help seniors find home-care and help families attend private or parochial schools. Most of the tax credit changes would come from a $20 million reduction in the $50 million Education Improvement Tax Credit businesses can get for donating to private and nonprofit educational institutions.
-- Transferring $136 million to the general fund budget from special funds used for parks, agriculture preservation and the horse-racing industry. Part of that transfer includes $65 million from the Keystone Recreation Park & Conservation Fund.
The Morning Call quoted Budget Secretary Charles Zogby as saying the governor does not support a bare-bones budget that removes proposals he made in February to spend $400 million more for public education, create a $25 million college scholarship for middle class students and $5.4 million more to reduce the waiting list for disabled adults to find community-based homes.
The governor does not support using all the recommendations outlined in the House report, Zogby said. But those ideas were presented to House and Senate leaders to get rank-and-file Republicans to understand the financial reality the state is facing.