HARRISBURG - With signs evident of public backlash to Gov. Tom Corbett's proposed cuts in state aid to higher education, Republican lawmakers are looking to restore that funding and make up the difference with cuts instead to public welfare programs.
Leaders of the GOP-controlled House and Senate said this week they will reshape the budget to maintain as much state aid to state-owned universities and ones like The Pennsylvania State University that receive substantial amounts of state aid as possible.
Several of them represent districts where universities receiving state aid are major employers and contribute to the local economy. Their statements came as hundreds of students from Penn State, the University of Pittsburgh and community colleges rallied at the Capitol this week against the governor's proposed 50 percent cut to higher education.
The first budget bills could come out of the Legislature early next month.
While the final budget will likely reflect a shift in some spending priorities from Corbett's proposal, the Republicans calling the shots in Harrisburg are in basic agreement about how much money will be in the taxpayer-supported state General Fund: $27.3 billion, which is 3 percent less than current levels.
The impact of the reduction is magnified, however, because federal stimulus money used to prop up education, welfare and corrections spending during the past two years is no longer available.
Agreement on $27.3 billion is significant because a major sticking point during the three-month budget stalemate in 2009 was an inability to agree on such a number.
Corbett said recently he's committed to the $27.3 billion, while acknowledging the rest of the budget line items will be shaped by negotiations on spending priorities. The governor also put markers down against any new state taxes, including a severance tax on natural gas production, and state fees.
Corbett and Budget Secretary Charles Zogby have framed the higher ed cuts as a way to open a debate about whether state aid should be targeted more to the students themselves than to a specific academic institution. A proposed $500 million cut in the basic education subsidy to school districts comes as a bill to establish a school-choice program for low-income students makes its way through the Senate.
Republican senators want to alter spending in three areas, said Senate Majority Leader Dominic Pileggi, R-9, Chester.
"There is a serious concern, and I share that concern, at the cuts in higher education, K-12 education and hospitals," he added.
Corbett's budget would cut state medical assistance reimbursements to hospitals by $150 million and jeopardize matching federal funds.
Meanwhile, Republican senators have taken the lead in developing legislation to allow local governments to levy an impact fee on natural gas drillers to offset municipal-related costs for roads and infrastructure repair. How such an impact fee would be structured is still being discussed in caucus, said Pileggi.
Several GOP senators from Southeast Pennsylvania have co-sponsored a bill by Sen. John Yudichak, D-14, Nanticoke, to levy an initial 2 percent severance tax, but colleagues from western Pennsylvania oppose a severance tax.
Senate Appropriations Chairman Jake Corman, R-34, Bellefonte, who represents Penn State's main campus, would like to restore all the proposed cuts to higher education in any budget bill. State aid to higher education has been flat the past decade, while operating costs have gone up, he said.
House Majority Leader Mike Turzai, R-28, Pittsburgh, said his caucus will propose a state aid level for higher education somewhere between current levels and Corbett's cuts.
House Appropriations Chairman Bill Adolph, R-165, Springfield, who chairs the state student loan agency is concerned about the severity of cuts to higher education, said spokesman Mike Stoll.
Qualms about higher ed cuts puts a target as far as GOP leaders are concerned on the Department of Public Welfare. The agency receives a 7 percent increase under Corbett's budget, reflecting several factors such as the end of stimulus funds, a state reimbursement payment to Washington to cover Medicare costs for senior citizens and increased medical assistance costs due to growing caseloads.
"I'm convinced there are savings available in the Department of Public Welfare," said Pileggi. House GOP lawmakers contributed to this push by unveiling a package of eight bills this week to require photo IDs to receive welfare benefits, more cross-checking of applicants for welfare benefits and preventing applicants from shopping for benefits by moving to other counties as a way to create savings by reducing fraud.
But questions exist about whether enactment of the House package would actually translate into the savings at DPW needed to erase all or part of the higher ed cuts in the 2011-12 budget.
The scrutiny of DPW got tougher following several audits by state Auditor General Jack Wagner, a Democrat, that took a critical look at DPW's handling of a cash-assistance program, medical assistance and heating aid for low-income households.
In one example, Wagner said his auditors found an average 10 percent rate of error in the handling of medical assistance cases at 90 DPW county assistance offices. That could involve up to $450 million in unnecessary costs if fixes aren't made, he added.
But Wagner warned that just cutting DPW spending alone won't yield savings. It requires tandem action by agency officials to make the necessary administrative changes to run programs more efficiently and avoid cases involving error or fraud.
He said the Corbett administration could probably get a handle on DPW programs by this fall.
"They should be able to determine in a five-to-six month period the appropriate administrative changes to be made to reduce the cost and not harm recipients," said Wagner.
It's difficult to get a fix on anticipated DPW cost savings because some of the Wagner audit findings are outdated and DPW has already made changes in response to some findings, said Sharon Ward, executive director of the Pennsylvania Budget and Policy Center, a think tank which advocates generating more state revenue from a severance tax and closing business tax loopholes to deal with fiscal problems.
Lawmakers can address DPW management issues better by providing money to fill vacant positions at county assistance offices, she added. This would help those offices deal better with a recession-spawned jump in individuals applying for medical assistance and food stamps.
Contact the writer: rswift@timesshamrock.com