Last updated: June 25. 2014 11:27PM - 464 Views
By Marc Levy Associated Press

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HARRISBURG — A $29.1 billion Republican-penned budget plan that makes higher payments to public schools, human services and public pensions passed late Wednesday but was headed for certain changes in the Senate.

The bill, made public barely two days ago, passed, 110-93, with one Republican joining every Democrat to oppose it. Five days are left in the fiscal year, and senators seemed likely to have their own ideas about where to find the revenues, particularly because the House plan relies on $380 million from the unlikely sell-off of the state’s wine and liquor operations.

Overall, the House plan would increase spending by about $727 million, or almost 2.6 percent, over the current year’s approved budget. The increase is deceptively small: More than $200 million in additional spending would occur without being reflected in the budget.

Democrats said it would not be adequate for public schools, and instead want a tax increase on the booming natural gas industry. They also have sought the expansion of Medicaid eligibility under the 2010 federal health care law and touted it as a way to save hundreds of millions of dollars.

The biggest task for lawmakers was to paper over a massive and unexpected revenue shortfall that helped tear a projected $1.7 billion hole in the $29.4 billion plan that Gov. Tom Corbett had proposed.

To fill the gap, Corbett’s plan was pared back by about $300 million. It taps about $300 million extra in off-budget programs and counts on $380 million from the sale of retail and wholesale liquor licenses, even though any such measure to sell licenses is essentially dead in the Legislature.

It also would reduce projected tax refunds by about $200 million and count on another $200 million in leftover program money while suspending $48 million over two years from an array of tax credits, including one for Keystone Opportunity Zones for economically distressed communities.

Some increases proposed by Corbett would be scaled back, while state agencies would be asked to squeeze their operating budgets to absorb higher public employee pension costs.

Some of Corbett’s priorities are included in the budget. For instance, it makes the first increase for special education funding in seven years and adds tens of millions more to help the intellectually and physically disabled.

Public schools would see an extra $100 million, including $70 million for instruction and operations, $20 million for special education and $10 million for school construction projects. But the new, $340 million “Ready to Learn” block grant program proposed by Corbett in his February budget plan was jettisoned from the House budget.

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