State Senate Passes 2012-13 Budget

The Pennsylvania Senate passed a nearly $27.66 billion state spending plan by a 32-17 vote late Friday, the Harrisburg Patriot-News is reporting.

The budget is $500 million higher than Gov. Tom Corbett's initial proposal, according to the Post-Gazette. Other parts of budget package will still need to be acted on by the state House and Senate.

The budget still requires action by Gov. Tom Corbett for final approval.

The plan requires no increase in taxes or new taxes. It maintains funding at current year levels for public universities and most school districts, but some fiscally struggling districts received a little extra money, the Patriot-News reported. It cuts funding for human services by $84 million and eliminates the Department of Public Welfare's cash assistance program, starting Aug. 1.

Senate Appropriations Committee Chairman Jake Corman, R-Bellefonte, said the budget is based on Senate Republicans' belief that controlling government spending and rejecting tax hikes is crucial to moving Pennsylvania toward economic recovery. 

"In these fiscally challenging times you have to make tough choices, but we also recognize that providing a quality education to kids of all ages is one of our most important responsibilities," Corman said.  "This budget includes funding to help counties and local agencies provide essential social and health services and programs for senior citizens and those with physical and mental disabilities."

While acknowledging what he calls "hurtful cuts to vulnerable Pennsylvanians," the state’s new budget contains important provisions intended to address the root of the state’s fiscal woes, said , D-Canonsburg.

“The bottom line is jobs and we have taken aggressive steps to improve the economy and employment picture,” Solobay said. “Economic growth and the jobs that come with it should make future budgets easier on everyone.”

The budget includes an aggressive plan to create a historic economic development project in Beaver County and tax incentives for a wide array of employers to create jobs.

Along with the tax credits required to close the deal for the construction of the $3 billion ethane “cracker” plant, the budget contains an expansion of the film tax credit to include its use in sound studios, and a more than doubling in the credit for hiring unemployed workers.

Lawmakers also adopted a “single-sales factor” for apportioning corporate net income taxes, finishing the shift from payroll and assets to sales when calculating business taxes. The change encourages employers to keep their manufacturing as well as their retail facilities in the state.

Other changes to the tax code allow the transfer of family farms to extended family without applying the inheritance tax, and provide credits to businesses that open up in renovated and preserved historic buildings.

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