The Daily Item, Sunbury, PA

February 4, 2014

Corbett's budget hinges on Medicaid expansion, pensions

By John Finnerty
The Daily Item

HARRISBURG - Gov. Tom Corbett’s fourth budget is a $29.4 billion spending plan that depends on federal approval of the governor’s alternative to Medicaid expansion as well as significant changes to the way the state operates its public pensions.

Corbett’s budget secretary Charles Zogby said even with projected savings from the governor’s Healthy PA plan, the state’s implementation of the federal Affordable Care Act will cost $133 million.

The Corbett Administration has warned that without action, the state’s contributions toward the pensions will increase $600 million in the coming budget.

Corbett wants the Legislature to reduce the amount the state needs to pay this year in the form of its contributions to the two major public pensions. That move would save the state $170 million and local school districts another $131 million. Zogby said Corbett hopes that the Legislature will enact pension reform this spring to come up with a long-term solution to the challenge of paying for the public pensions.

To help deal with the increased pension costs, Corbett also wants to move $225 worth of investments and cash reserves from a tobacco settlement and health investment venture account.