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Pennsylvania legislature passes budget with cuts

By Edith Honan

HARRISBURG, Pa (Reuters) - Pennsylvania's Republican-controlled state legislature gave final approval on Wednesday to a $27.15 billion budget that will cut spending by three percent from the current fiscal year.

The budget is due to be signed by Republican Governor Tom Corbett on Thursday. The state's fiscal year begins July 1.

Corbett is among a new class of Republican governors that have made a splash in states like Wisconsin, Ohio and Florida by calling for major cuts in government spending and tax breaks.

In March, Corbett unveiled a budget that would shrink spending back to fiscal 2009 levels. Spending increases after 2009 were largely paid for by federal stimulus funds designed to help states emerge from the recession and which are no longer available.

"This budget sorts the must-haves from the nice-to-haves," Corbett said at the time.

On Tuesday, the state Senate approved the spending plan, and the state House of Representatives passed it late on Wednesday. The House vote following five hours of debate, and centered largely on what to do with an expected surplus.

The state Department of Revenue said Pennsylvania took in $24.3 billion in revenue so far this fiscal year, beating projections by more than $540 million, or 2.3 percent. The number could swell to $700 million by the end of June.

Republicans have argued that the money should be held in reserve, while Democrats called for most of the money, or about $448, to go to the Department of Education.

The budget, which does not include any tax increases, would cut about $860 million from public schools and scale back funding considerably for public universities, lawmakers said.

The state teachers union said the cuts would mean increasing class sizes, eliminating programs, laying off teachers, as well as forcing school districts to raise taxes.

No Democrat from either house voted in favor of the budget.

"These cuts are going to hurt people," said Representative Frank Dermody, the Democratic House leader. "And it's not like the money isn't there. The money is there."

Senator Vincent Hughes, a Democrat who voted against the budget, said the plan would hurt students, seniors, taxpayers and Pennsylvania's most vulnerable.

"The Republican spending plan is short sighted and filled with pain for too many in Pennsylvania," Hughes said in a statement. He also said the plan was crafted without any input from Senate Democrats.

When Corbett, a former attorney general, came into office in January he faced an estimated fiscal 2012 budget shortfall of roughly $4 billion. During his election campaign, he pledged to avoid raising taxes to fill the gap.

(Reporting by Edith Honan; Editing by Greg McCune)

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