From the PHILADELPHIA INQUIRER:
…That crisis, though smaller in scope, is not unlike what President Obama faced when he took power. The difference is, the state can’t run a deficit. Pennsylvania’s constitution requires the state to balance its books with taxes or budget cuts.
Some in his own party say Corbett may have to renege on a pledge not to impose a tax on drilling in the Marcellus Shale gas fields. He’ll surely face opposition to his plan to sell the state’s 620 union-manned liquor stores. And every proposed budget cut will be fought by lobbyists and constituent groups…
With the loss of federal stimulus funds next year, a budget gap could widen to $4 billion. The state also needs to fill a $472 million hole for highway capital projects. The extra pension costs, which escalate in 2013, could be from $3 billion to $5 billion; even Corbett isn’t sure…
Click here to read the full article.
State retirement benefits will have to be cut. Pennsylvania is ranked 49th out of 50 on the US Census Bureau list of state employees per state population. So, in personnel terms, Pennsylvania is one of the leanest in the nation. However, generous benefits have been underfunded by the state and pushed our public pension funds into multibillion-dollar holes.
References:
http://www.pennlive.com/editorials/index.ssf/2010/05/a_lean_pennsylvania_rendell_ke.html
http://www.npr.org/templates/story/story.php?storyId=124825100