Corbett at a crossroads

The governor's budget policies have serious consequences for those hit by economic hard times in the Scranton/Wilkes-Barre area, which had a 9.4 percent unemployment rate in November, the highest among the 14 metro areas in the state. State and federal budget cuts have created a crisis for local nonprofits operating food pantries and other programs to help the poor, homeless and jobless, said Gary Drapek, president of the United Way of Lackawanna and Wayne counties.

"What we are seeing now especially is the cold weather starting to hit," Drapek said.

The United Way of Pennsylvania released a statewide survey in late November indicating that state budget cuts in fiscal 2012-13 impacted 69 percent of some 800 responding nonprofits. As a result, 51 percent of respondents implemented layoffs, 38 percent reduced hours and 47 percent expanded waiting lists for services.

Corbett got legislative approval to end a state welfare program dating back to the Great Depression last summer. The General Assistance program had provided $200 monthly payments to some 70,000 Pennsylvanians, including the disabled, domestic violence victims and people getting addiction treatments.

The governor said he wants to shift priority instead to helping thousands of individuals with mental disabilities on long-standing waiting lists for placement in group homes and other care services. He plans to propose an additional $20 million to reduce those waiting lists in the next budget.

"We are doing that (GA program) before we take care of people who can't help themselves?" Corbett asked, questioning past policies. "That's out of sync."

The general assistance recipients used those payments for rent or heating bills, Drapek said. They are now seeking help from local programs that have less money to go around because of other cuts.

State aid to county-run human services programs has been cut by Corbett, continuing a long-running trend. The current budget slashed aid for human services by $84 million, or 10 percent, while a pilot project giving 20 counties flexibility to allocate the money is tested. Luzerne and Wayne counties are participating in the pilot, which has the support of the County Commissioners Association of Pennsylvania.

The cuts have led to waiting lists for individuals seeking mental health and drug and alcohol services, said Rep. Gene DiGirolamo, R-Bensalem, chairman of the House Human Services Committee.

"I would really like to see that 10 percent cut restored," DiGirolamo said.

No issue dogged the governor more during 2012 than questions about why the state investigation of Sandusky - first under Corbett and then his appointed successor Attorney General Linda Kelly - took nearly three years. Incoming Attorney General Kathleen Kane said a top priority is investigating the pace of the Sandusky probe. Corbett said it was important to use the secrecy of a state grand jury to obtain testimony from a number of witnesses against Sandusky, and that took some time.

A statewide poll by Franklin and Marshall College last fall found only one in six - or 17 percent - of respondents believe Corbett did an excellent or good job investigating the Sandusky case, while nearly two-thirds - or 65 percent - think he did a fair or poor job.

The poll of 632 registered state voters conducted between Sept. 18 and Sept. 23 has a margin of error of plus or minus 3.9 percentage points.

As the new year began, Corbett dropped a bombshell by filing a federal antitrust lawsuit to block the NCAA from imposing sanctions and a $60 million fine against Penn State for its handling of the Sandusky case. He said he initially thought the sanctions were excessive but immune to challenge. He then discovered evidence that the NCAA didn't follow its own rules in imposing the sanctions.

"The stakes for Corbett in this bold strategy are immense," wrote Terry Madonna, Ph.D., pollster at Franklin and Marshall College and Michael Young, Ph.D., of Michael Young Strategic Research in their "Politically Uncorrected" column.

"In going after the sanctions and the NCAA, he is adopting a politically popular policy. At the same time, he risks the credible criticism that he is a hypocritical politician who initially supported the NCAA actions as necessary 'corrective actions,' but is now changing course because he is in political trouble."

The current state budget provides essentially flat funding for basic and higher education, a negotiated agreement made possible as state tax revenues improved last year. But public schools are still coping with the loss of almost $1 billion because of statewide cuts in fiscal 2011-12.

Corbett said the first-year cuts are a consequence of the end of federal stimulus aid, while the House Democratic Appropriations Committee said locking in those cuts meant more hikes in local school property taxes and reductions to programs and staff.

Corbett cited a new law requiring that teachers be evaluated on how well their students perform on standardized tests as one of his major achievements.

The current budget expands the amount of state tax credits available to businesses that make donations to schools for scholarships and other programs from $75 million to $100 million. Corbett has yet to win legislative approval for proposals to give scholarships to low-income students attending the worst-performing public schools and to change charter school oversight.

Corbett has pointed to the creation of more than 100,000 private sector jobs - many in the natural gas industry - as a sign his business policies are working. He attributes the gain to holding the line on state tax rates while continuing to phase out the Capital Stock and Franchise Tax and enacting state laws to bring solvency to the state Unemployment Compensation Fund and limit corporate liability in some civil lawsuits. A new law exempting family farms from paying the state inheritance and realty transfer taxes means families will no longer have to sell farms to settle estates, Corbett said.

Providing a long-term state tax credit for an ethane cracker plant in Beaver County starting in 2017 offers an opportunity to re-industrialize western Pennsylvania and create a new industry sector, Corbett said.

The cuts in state aid to education and human services funding have cost public sector jobs during the past two years, said Sharon Ward, director of the Pennsylvania Budget and Policy Center, a Harrisburg think tank critical of Corbett's budget cuts.

"In the 2011-12 school year, Pennsylvania lost 20,000 jobs, more than were added through gas drilling in the Marcellus Shale since the start of 2010," she said.

Corbett's 2010 campaign pledge not to hike state taxes led to enactment early last year of the alternative he offered - the county impact fee on natural gas production to offset the impacts of drilling operations. Corbett said the impact fee puts revenue directly in the hands of local officials.

The impact fee law provides for 60 percent of revenue going to counties and local governments covered under impact fee drilling ordinances and 40 percent distributed for statewide programs. An initial $204 million in impact fee revenue was generated based on natural gas production in 2011. That amount is half what a state severance tax would have generated in revenue had it been in effect between July 2009 and December 2011, the Budget and Policy Center estimated.

"There are real questions about whether Pennsylvania's fee is enough to pay for the impacts of drilling on local communities," Ward said.

A key provision of the impact fee law remains on hold. The state Supreme Court is weighing an appeal of a Commonwealth Court ruling that struck down a provision limiting the ability of municipalities to control the location of drilling activity.

Corbett is expected to unveil his long-awaited transportation funding policy ahead of the budget address. It's been 1? years since a gubernatorial commission that he created issued a report making recommendations to generate $2.5 billion in new transportation revenue annually to fix deteriorating roads and bridges. The commission's recommendations include lifting the cap on the state oil company franchise tax. The governor said he's considering that and other recommendations in the report.

The delay in action prompted House Minority Leader Frank Dermody, D-Allegheny County, to suggest renaming the state Transportation Department as the "Department of Deferred Maintenance."

Corbett cut a high profile directing the quick emergency response during the devastating flooding in the Susquehanna River Basin in 2011.

The governor was less visible when a stalemate developed in the Republican-controlled state House over a recovery aid package to supplement federal disaster assistance. The Senate approved a $150 million bond issue to underwrite the state's share of aid. The House approved no-borrow bills that drew money from the Motor License Fund and other transfers.

Corbett eventually supported the House approach, but the bills weren't reconciled in the last session. Meanwhile, PennDOT shuffled money to fix washed-out roads and erect bridges, sometimes on a temporary basis, in Northeastern Pennsylvania.

Corbett added $11 million this year to a state program to help financially distressed cities. The funding was added in anticipation of additional cities coming under Act 47. This was the source of a $2 million no-interest state loan last summer to the city of Scranton.

Within months of taking office, Corbett signed off on an inherited issue by approving a $20 million state grant to help renovate PNC Field in Moosic.

Corbett said he's making good on a campaign promise by reducing the size of the state vehicle fleet by 14 percent, with a planned 20 percent reduction by 2019. He touted the new PennWatch website offering information on state employee salaries and state contracts, increased efforts to combat welfare fraud and tighter review of applications for community development funding under the Redevelopment Assistance Capital Program among reform accomplishments.

At year's end, Corbett amended his 2011 financial interest statement to include trips worth more than $2,300 that were paid for by a Pennsylvania businessman and campaign contributor. The omission was attributed to clerical error.