Governor Corbett's 2011-12 Fiscal Budget contains details that will ripple through the economy of our State. This brief article outlines a broad overview of his proposed budget.
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2011-12 Budget Highlights
• The 2011-12 Governor’s Budget is balanced with no tax or fee increases.
• The budget refocuses the investment of tax dollars in the core functions of government, including:
- adhering to fiscal discipline;
- promoting limited, transparent and effective government;
- supporting free enterprise and job creation;
- funding students and promoting educational excellence
- protecting public health and safety; and
- maintaining the human services safety net.
• The 2011-12 General Fund budget is $27.3 billion – a decrease of $866 million, or 3.1 percent, from 2010-11. Overall, state spending is reset to near 2008-09 levels.
• To address the withdrawal of monies from the Tobacco Settlement Fund in 2009-10 and 2010-11, this budget maintains the operation of programs supported by tobacco funds by shifting the funding for those programs to the General Fund. Excluding this $324 million shift, spending in the General Fund is actually reduced by 4.2 percent.
• The budget eliminates 103 appropriation line items – cutting nearly $850 million in annual spending. It reduces funding for more than 150 appropriations and consolidates an additional 55 appropriations to streamline government.
• Administrative spending in the budget is reduced by more than 2 percent and over 1,500 complement positions are eliminated.
• This budget consolidates and streamlines economic development programs to focus on job creation and attracting businesses to Pennsylvania.
• The budget maintains important tax credit programs at 2010-11 levels, including the Job Creation and Film Production tax credits, and increases the cap on the Research and Development Tax Credit from $40 million to $55 million.
• The budget reinstates the phase-out of the Capital Stock and Franchise Tax – providing over 100,000 job creators with more than $70 million of tax relief in 2011-12. The phase-out of this tax will continue until it is completely eliminated in 2014.
• The Basic Education Funding subsidy is reset to the 2008-09 level, the last year before federal stimulus funds were available, which results in an average annual increase of 2.8 percent in this funding over the last ten years. In addition, the budget proposes initiatives to give school districts increased flexibility and tools to improve student performance.
• The budget increases funding for the Department of Corrections and the Board of Probation and Parole and provides funding for two State Police cadet classes to maintain trooper strength on our highways and in our communities.
• The budget helps individuals achieve self-sufficiency through sensible welfare reforms while it preserves services for those in need who are eligible.
2011-12 Budget Overview
Lottery Fund $1.5 B
All Other Funds $7.5 B
Motor License Fund $2.6 B
Augmentations & Fees $2.6 B
General Fund $27.3 B
Total Operating Budget
Federal Funds $22.1 B
Total $63.6 Billion-This includes all medicare, medicaid and transportation money from federal sources.
Sources of Revenue
Non-Tax Revenues 3.5%
Other Taxes 8.2%
Cigarette Tax 3.9%
Gross Receipts Tax 4.8%
Sales & Use Tax 31.0%
Corporate Net Income/
Capital Stock & Franchise Tax 9.9%
Personal Income Tax 38.7%
Higher Education 4.6%
Human Services Programs 16.6%
Corrections/Probation and Parole 7.4%
General Fund Expenditures
Medical Assistance/ Long-Term Living 24.4%
Debt Service 4.2%
All Other 9.5%
PreK-12 Education 33.3%
Total $27.3 Billion