Corbett calls for pension system changes, increase to education in $28.4 billion plan

Gov. Tom Corbett is proposing a 2.4 percent increase in Pennsylvania spending in the next fiscal year.

He used his budget address Tuesday to make a few other big announcements touching on transportation, Medicaid and the state’s pension system.

In his address before the General Assembly, he framed the $28.4 billion budget proposal as a turning point as Pennsylvania regains its financial footing.

“Now is not the time to be timid in our approach. Now is not the time to cling to old ideas and the status quo,” he said. “Now is not the time to make small changes and expect big results.”

Multimillion-dollar K-12 increases

After calling for sweeping cuts in previous budgets, Corbett is proposing multimillion-dollar increases in kindergarten-through-12th-grade education and programs serving those with disabilities.

Corbett intends to generate more money for transportation projects, which face a $3.5 billion deficit annually, by beginning to lift the cap on the wholesale gas price paid by gas stations and siphoning funds from revenue sources such as driver’s license fees. He said those changes could bring in $500 million in the next fiscal year

He said he would combine that with a 17 percent reduction in the tax paid by motorists at the pump.

Corbett also used his speech to announce he’ll reject a Medicaid expansion authorized under the federal Affordable Care Act.

“Without serious reforms, it would be financially unsustainable for the taxpayers, and I cannot recommend a dramatic Medicaid expansion,” the governor said.

Corbett’s long-awaited answer to the state’s rising pension costs is threefold.

He said he would lower the state’s payments on its pension debt, spreading out the obligation over a longer period. He also wants to shrink future benefits for current state employees, and enroll all future state employees into a 401(k)-style plan.