Corbett signs budget, vetoes millions in spending

HARRISBURG, Pa. -- Gov. Tom Corbett signed the state budget 10 days late on Thursday and used his line-item veto to strike $65 million from the General Assembly's own appropriation, urging a renewed effort to cut public-sector pensions for newly hired teachers and state workers.

Corbett, a Republican, said he wanted to avoid any more school districts raising property taxes to cover their pension obligations.

He cut $7.2 million in spending designated by the Legislature, noting that the proposal sent to him last week increased the General Assembly's own $320 million budget by 2 percent and included $5 million for parking.

"They filled the budget with discretionary spending and then refused to deal with the biggest fiscal challenge facing Pennsylvania," Corbett said in a Capitol news conference.

The pension systems represent a growing financial strain on state government and local school districts, but despite pressure from Corbett over the past couple years, no deal has made it to his desk.

He said lawmakers left Harrisburg "with unfinished business. They need to come back and enact pension reform."

Some had speculated he may call a special legislative session on pension reform, but at the news conference he said only that all options were on the table.

The Republican-penned state budget plan passed both chambers without a single vote from a Democrat, and Corbett has said that his administration did not agree to all the final details.

The big task for Republicans was to address a massive and unexpected collapse in tax collections that tore a gaping $1.7 billion hole into the $29.4 billion budget plan that Corbett proposed in February. The one he signed Thursday was $27 billion.

Democrats had proposed making up the shortfall by expanding Medicaid under the 2010 federal health care law, delaying planned tax cuts for businesses and increasing taxes on natural gas extraction and sales of tobacco products.

While Senate Republicans had entertained the idea of a tax increase, House Republicans blocked it and Corbett had insisted he would not approve a tax increase without action on pension legislation.