HARRISBURG - Gov. Tom Corbett will unveil a state budget today that includes a plan to delay the full impact of a hike in public pension costs for a year in order to ease fiscal problems facing schools.
He will propose temporarily lowering the minimum amount that state government and school districts would pay through the employer contribution next year for public pension costs.
Savings from this move could amount to $130 million for school districts and $170 million for state government, Budget Secretary Charles Zogby said. It would go a long way to addressing one of the key cost issues threatening to throw the fiscal 2014-15 budget out of balance.
But a statewide officeholder said not paying the scheduled employer contribution will have negative long-term consequences.
"That would certainly make our short-term budget problems easier to handle, but it is also long-term a very bad deal for the state's fiscal health," Auditor General Eugene DePasquale said.
Corbett is scheduled to go before a joint House and Senate session at 11:30 a.m. and emphasize his efforts during three years in office to hold the line on state taxes and create and protect private-sector jobs.
He is expected to propose a new state block grant program to steer money to school districts based on academic performance.
Aside from tapering the pension payments, Corbett plans to focus on reducing pension benefits for newly hired state government and school district employees. The Legislature appears to lack the political will to tackle benefits for current employees, he said.
A bill sponsored by Rep. Mike Tobash, R-125, to create a hybrid pension for new employees is the main vehicle for state pension reform, Zogby said.
Tobash's bill would have the first $50,000 in annual income earned by a new employee covered under the traditional defined-benefit plan and income above that threshold under a defined-contribution plan. Meanwhile, Corbett is expected to propose a $20 million boost for special education following years of level funding.
The new special education dollars would be distributed to school districts in line with recent recommendations made by a special legislative commission, Zogby said. This panel suggested steering funding for special needs students based on the seriousness of their disability and community factors.
Currently, special education funding is based on an estimate that the average daily enrollment of each district includes 16 percent of students with special education needs.
The governor's budget will include increases for services for senior citizens and individuals with disabilities. Corbett will propose modest increases for economic development programs, including tourism promotion, Zogby said.
The public is not likely to hear much in the governor's speech about liquor store privatization or help for fiscally distressed cities.