HARRISBURG - When Gov. Tom Corbett gives his 2012 budget address this morning, many expect him to focus on potential cost savings in education.
However, policy experts said Corbett should try to find a way to address rising pension and retiree health-care costs and create a climate in which jobs can be created in the commonwealth.
Lawmakers on both sides of the aisle said they are hoping Corbett's ax doesn't fall on education.
Regardless of the hopes and concerns of lawmakers and experts, Corbett has said he wouldn't comment on the budget until after his address.
Budget cuts must be expected, said state House Finance Committee Chairman Kerry Benninghoff, R-Centre.
"This, the governor's address, is just the start of the budget season," Benninghoff said. "I do believe that we will reach our goal of passing a balanced budget with a little wrangling here and there."
Several lawmakers said they were wary about potential education cuts in Corbett's budget plan.
Last year, Corbett pushed through massive cuts in education that included: cutting $550 million in basic education; removing $100 million from Accountability Block Grants, which is an investment of $200 million made available to school districts to support programs to improve educational achievement of students; and reducing spending by $625 million for state universities and colleges.
"I'm hoping not to see any more cuts in education or public service from this administration," said state Rep. Kevin Murphy, D-Lackawanna.
On the left, there are calls for increasing revenue.
Corbett "should reject the compromise Marcellus Shale drilling tax, which is too little," said Sharon Ward, director of the liberal Harrisburg-based economic think tank Pennsylvania Budget and Policy Center.
Ward said the governor should avoid additional cuts to colleges and universities and increase his support for public schools, particularly those in the poorest districts.
Other budget analysts point to the state's ever-increasing pension debt that must be reckoned with sooner or later.
"Pennsylvania has to do something about its pensions," said Bob Williams, president of State Budget Solutions, a national pro-reform organization that focuses on state and local budgets.
"The state can't keep kicking the can forward," Williams said. "There is a tendency to ignore the problem and hope the economy will recover, but that hasn't happened. It's getting worse."
Pennsylvania has two state pension plans: the State Employees Retirement System, or SERS, and Public School Employees Retirement System, or PSERS. Together, they have an unfunded liability of more than $29 billion.
In the current year, Pennsylvania contributed $693 million to SERS and $761 million to PSERS. Using current projections, the state will be paying $2.1 billion annually into SERS and $8 billion annually into PSERS by 2035, to make up for a decade of underfunding the plan while also increasing benefits.
According to a new report from the National Bureau of Economic Research, a New York-based research nonprofit, the pension obligation will top $1,500 per household per year in Pennsylvania for the next 30 years.
