Pennsylvania winds up with $540 million surplus as battle over spending cuts heat up

In the midst of heated debates over Pa. Gov. Tom Corbett’s proposed spending cuts, there is a bright spot: the Pennsylvania state government is heading into the final month of the fiscal year with a $540 million surplus.

Despite the surplus, the state continues to project a multibillion-dollar budget deficit for the fiscal year beginning in July because Pennsylvania will be losing the stimulus money that has helped to ease money woes stemming from the recession, as the Associated Press reports.

The surplus is ammunition, though, for Pennsylvania Democrats who oppose Corbett’s proposed $2.6 billion in spending cuts to balance the budget. Even some Republicans are starting to wonder if such deep cuts are needed.

Corbett says that the state should spend no more than the $27.3 billion he has proposed, and he does not want to increase taxes.