Pennsylvania governor likely to boost education in election year

By Hilary Russ (Reuters) - Pennsylvania Governor Tom Corbett, who is facing an uphill battle as one of the most vulnerable U.S. governors up for re-election this fall, is expected to propose spending more money on education in what could be his last annual budget address on Tuesday. Critics have scorned the Republican, saying he earlier slashed funding for public schools and colleges by at least $1 billion. It is far from clear where Corbett, who has already announced some increases in education spending, will get the funds. The Keystone state is facing a budget gap of at least $1.2 billion and its economic recovery is still only limping forward. "He's going to want to use his budget to shore up political liabilities. But he's doing so in an environment that is very constrained," said Christopher Borick, a professor of political science at Muhlenberg College in Allentown. Corbett last week he said he would boost funding for the state's pre-kindergarten program by $10 million. He also challenged the state's education funding formula in January, saying it's unfair and needs to be changed. "It's a matter of where he finds that money and how he pulls it off," said Pennsylvania Representative Frank Dermody, the House Democratic leader. "He's going to have to rob Peter here to pay Paul." Indeed, pension obligations will balloon by $610 million next year, contributing to a deficit of $1.2 billion or more. Corbett may seek savings by renewing calls for changes to the pension system. In addition, state revenues could come in $110 million less than previously forecast, according to the Independent Fiscal Office, a budget watchdog. There's scant indication the state can grow its way out of its problems. With the exception of New Jersey, Pennsylvania created a smaller percentage of new jobs in December, compared to the prior 12 months, than all other states in the Northeast and all of its neighboring states, according to U.S. Bureau of Labor Statistics data. WHAT THE OPPOSITION WANTS Corbett has faced a drubbing in the polls since he took office in January 2011. As of Thursday, less than a quarter of Pennsylvania voters said he deserved to be re-elected, according to a Franklin & Marshall College poll. Democrats blame tight budget conditions on more than $1.2 billion in corporate tax cuts and subsidies under Corbett, not including another $880 million for the coming fiscal year. To raise revenues, Democrats want the governor to expand Medicaid under Obamacare, which could bring in $400 million. They also want to suspend a phase-out of the capital stock and franchise tax, impose new taxes on natural gas extraction and smokeless tobacco, and modernize the state's liquor sale system. But for many, the budget battles come back to education, a sensitive topic in a state that has seen schools lose teachers, programs and employees. In Philadelphia, Pennsylvania's biggest city, the school district cut 3,800 staffers last year. It has shuttered two dozen schools over two years and is now trying sell some of those buildings to raise cash. It rehired about 1,000 employees in the fall after the state kicked in additional funding. Corbett's Democratic predecessor, Ed Rendell, cut the state's share of basic education funding in the 2010 and 2011 budgets as revenues slumped, relying on temporary stimulus money until those federal funds dried up. In 2012, Corbett brought state funding for education back up to 2008 levels, but that was still at least $500 million below the previous year's total without the stimulus funds. For the current fiscal year, Pennsylvania is spending $5.5 billion on basic education. "They've stripped away significant resources to our public schools," said Senate Democratic leader Senator Jay Costa. "I fully expect they will make an additional (education allocation) to try to rehabilitate his dismal numbers." Corbett argues that he has dedicated more state revenues to basic education than at any time in Pennsylvania history. "He's right, but that's not the narrative that's existing on the schools as they lay people off," said G. Terry Madonna, director of the Franklin & Marshall poll. "That's the narrative that he hasn't been able to manage, and that's hurting him." (Reporting by Hilary Russ; Editing by Leslie Adler)