That's right a $500 million surplus will be the bottom line on the fiscal year that began on July 1, 2010 and ends June 30, 2011. How could that be possible?
The economic recovery is real, with more people working and buying, boosting revenues to the state above the 3% revenue growth that was assumed in the current budget year. Revenues for the year appear to be on course to be up more than 5%.
The result is a $500 million plus surplus when we close the financial books this year on June 30th.
In fact, the surplus might be even bigger, as the April revenues were $273.2 million higher than the current budget estimated. Or revenues were 9% higher than projected. A strong performance indeed.
But this good news is apparently possibly causing a fight between Governor Corbett, Majority Leader Pileggi, and Senate and House Democrats.
Senator Pileggi has signaled that the higher than projected revenues should make it possible to reduce the 2011-12 budget cuts to education and other vital services that Governor Corbett had proposed.
Governor Corbett, however, is opposing using the increased revenues generated by economic growth to increase the total 2011-12 revenues appropriated to meet expenses. He threatens a veto. His position would require still massive cuts to education or other services, despite the 2010-11 surplus that could be used to reduce those cuts.
Cuts that slashed our state colleges and forced the ending of full day kindergarten were harmful and should have been avoided, even before the April revenue figures confirmed a $500 million plus surplus will be available to carry forward to 2011-2012. Now such budget choices really are hard to fathom.
Perhaps this budget will not be done by Memorial Day as some thought a month ago.