Governor Tom Corbett proposed $27.3 billion in spending for the fiscal year that starts July 1, a decrease of about 3 percent from this year's budget. It assumes that improving state tax collections will help produce a surplus of more than a half-billion dollars by the end of the current year and grow by 4 percent next year.
RELATED: Pennsylvania Office of the Budget
"The substance of this budget is built on four core principles: Fiscal discipline, limited government, free enterprise and reform," the Republican governor said in a speech before a joint assembly of the House and Senate.
In justifying a wide-range of cuts, he said: "This budget sorts the must-haves from the nice-to-haves."
The Republican governor, who took office in January, delivered his budget address to a joint session of the House and Senate late Tuesday morning.
In the Education Department budget, the governor proposes cutting about $550 million, or 10 percent, from money for instruction in K-12 public schools and eliminating all $260 million in grants that are being given this year to school districts to invest in learning, including pre-kindergarten, full-day kindergarten and class-size reduction in kindergarten through third grade.
He advocates spending cuts of about $625 million - more than 50 percent - for the 14 state-owned universities in the Pennsylvania State System of Higher Education, plus Pitt, Temple, Penn State and Lincoln.
Corbett was expected to ask school teachers to accept a one-year pay freeze, even if it means reopening local union contracts, his top budget adviser, Charles Zogby, told reporters at a briefing before the speech. He will seek to eliminate state support for teachers' advanced degrees, Zogby said.
Corbett didn't count on that projected $600 million in combined annual savings in his budget proposal, Zogby said.
He also wants to tighten the law that requires voter approval for any district's increase that would raise property taxes above the rate of inflation, Zogby said. He also wants to try to give cash-strapped schools more power to lay off teachers without regard for seniority, Zogby said.
The budget calls for spending hundreds of millions more on state pensions and debt. Spending for social services also would increase due to the rising cost of health care and the recent economic downturn, according to Corbett's budget authors.
More than 1,500 state jobs would be eliminated under the budget, bringing the total down from nearly 81,500 to fewer than 80,000.
This current year's $28 billion budget is supported by federal stimulus money and transfers of state surpluses that are not expected to be available next year, producing a potential shortfall next year that officials had estimated at $4 billion.
Corbett, the former state attorney general, promised during last year's election campaign that he would balance the budget without increasing state tax or fees.