Governor Corbett signs new state budget

By Karen Langley and Laura Olson

Published by the Post-Gazette

7/1/12



HARRISBURG -- In a repeat performance, Gov. Tom Corbett signed another no-tax-hike state budget into law minutes before the fiscal year expired, leaving unresolved a charter school proposal that pushed negotiations to the deadline.

The final $27.66 billion budget package includes several significant victories for the Corbett administration, including a tax incentive aimed at luring a Shell Oil Co. plant to Beaver County, a measure to alter how teachers are evaluated, and a proposal to tame rising prison costs through targeted sentencing.

Mr. Corbett signed the general appropriations bill at 11:45 p.m., beating last year's mark by two minutes. He waited for legislative leaders to join him before thanking them for delivering the budget.

"Hopefully we're developing a habit, and I think the Pennsylvania citizens will appreciate that habit of on time," Mr. Corbett said.

State lawmakers scrambled Saturday night in an effort to duplicate last year's on-time budget, spending a rare weekend session debating bills needed to enact the spending plan that was already waiting on the governor's desk

The governor, however, failed in a last-ditch attempt to win support for provisions to smooth the road to opening up more privately run, taxpayer-funded charter schools by putting the decision in the hands of an appointed state board, rather than locally elected school boards,

Disagreement among the majority Republicans on the oversight of charter schools took up critical midday hours, as the House and Senate passed slightly differing versions of reforms that had loomed large in budget negotiations. As the two chambers maneuvered their charter plans, it appeared that and another education proposal -- an effort to create a commission on special education funding -- would not be resolved before the summer recess.

But votes on state aid for the University of Pittsburgh, Penn State and two other Pennsylvania universities were completed in the final hour of debate.

A proposal to base teacher evaluations in part on student performance also headed to the governor as part of a schools omnibus bill, and another to expand a program of tax credits for businesses that donate to private-school scholarships was approved in late-night votes.

Above all, the governor praised lawmakers for approving the ethane tax credit.

"As someone who grew up in Pittsburgh, I saw firsthand the devastating effects of the decline of the steel industry," Mr. Corbett said. "I saw what it did to the economy, what it did to the psyche of Western Pennsylvania."

The new incentive, he said, will help propel the growth of new industry in Pennsylvania by making the state a processor and manufacturer of natural gas, as well as a supplier.

"Simply put, we will usher in a new industrial revolution in Pennsylvania," he said.

The governor had said he would not sign the $27.66 billion budget without related legislation that distributes school funding, changes tax credits and makes certain welfare policy changes.

Mr. Corbett told reporters on Friday that he remained "fairly confident" the set of budget bills would reach him on time.

It was early afternoon on Saturday before the House cleared two pieces of accompanying legislation, a schools bill that will incorporate student performance into teacher evaluations and a welfare bill that will allow up to 20 counties to receive human services funding in block grants.

Democrats fought for hours against the bills, arguing to apply the proposed teacher evaluation system to instructors in charter schools and to undo the elimination of a program that distributing cash benefits to 61,000 people.

Both the House and Senate charter proposals would create a commission to examine funding for charter schools, allow charter schools to receive funding directly from the state and require them to undergo annual audits. Unlike a version afoot earlier in the week, neither proposal would make it easier for an existing public school to become a charter school, nor would they allow prospective charters to apply directly to a single statewide authorizer.

But the House plan goes further by including an independent board that could oversee charter and cyber-charter schools.

After a Senate panel adopted that chamber's plan, Sen. Jeffrey Piccola, R-Dauphin and chairman of the Education Committee, said opposition from the state's largest teachers union had jammed passage in the House of an earlier proposal with more avenues to authorization for new charters.

The Pennsylvania State Education Association has opposed statewide charter authorizers and measures to make it easier to transform district schools into charters.

"While I would have loved to have gotten some strong charter reforms in -- and we've been working on this literally for three-and-a-half years -- it's clear at this late hour there's not sufficient support in the House," Mr. Piccola said Saturday night. "And the governor's office, the governor, just simply hasn't laid the proper groundwork for driving this thing across the finish line."

House Republicans said Mr. Corbett supports their plan. His office did not respond to requests for comment, and at his midnight news conference, the governor said they'll have more time this fall.

House Majority Leader Mike Turzai, R-Bradford Woods, said he was confident it will pass in the fall.

Bob Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said he was encouraged by the passage of the House proposal. He had not reviewed the Senate plan.

"It adds both more responsibility to charters and more accountability to charters, which I think is good," he said.

But perhaps the main highlight for the governor was the tax incentive sought for ethane-processing facilities, including the multi-billion dollar plant that Shell is considering locating near Monaca.

Beginning in 2017, a nickel-per-gallon tax credit would be offered to companies for purchasing and using ethane from gas wells within the commonwealth. In order to be eligible, a company must invest at least $1 billion and create at least 2,500 construction jobs.

There would be no annual cap on the total credits, compared to an initial proposal for allowing up to $66 million a year. Legislative staffers said that would give flexibility in attempting to woo facilities beyond the potential Shell plant.

The Corbett administration made an unusually aggressive public push for the tax credit, arguing that the incentive is necessary to ensure the company does not decide to locate instead in West Virginia or Ohio.

Labor unions and business leaders both rallied behind the proposal, and it was one of the few Republican-crafted provisions for which some Democrats urged support in the final hours of debate.

"We are told this is the motherload of crackers, and that other crackers may come," said Rep. Rob Matzie, D-Ambridge. "We are hopeful that those jobs will come sooner rather than later."

Others remained critical of the addition, unsuccessfully pressing for further requirements in return for the lucrative tax credits. "We're giving incentives to a company whose profits last year were larger than the entire general fund budget," said Rep. Rick Mirabito, D-Lycoming.

A proposal to expand the Educational Improvement Tax Credit, a program for businesses that donate to private-school scholarships, also won approval after the House inserted it into the tax code. The measure will make $100 million in tax credits available each year, up from $75 million, while creating a related program with $50 million in credits targeted at students whose local school is among the state's 15 percent lowest-performing institutions.

As hours ticked away, lawmakers also gave final approval a last-minute addition that temporarily prohibits gas drilling permits from being issued in a portion of southeastern Pennsylvania.

That provision first became public on Friday, and drew protests from western Pennsylvania Democrats that it unfairly offered southeastern residents protections from potential drilling impacts that weren't available to other Pennsylvanians.

The measure passed the House easily Saturday evening, picking up nearly two-dozen Democratic votes, and later cleared the Senate on a vote of 43-6.

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