Heather Smith - Wednesday, December 21, 2011
Gov. Tom Corbett's top budget adviser warned that Pennsylvania's tax collections will continue to suffer from economic weakness and said he is developing a plan to freeze some state spending to ease a shortfall that he expects will reach at least $500 million by the end of the fiscal year in six months.

Budget Secretary Charles Zogby would not give details about the kind or amount of spending that could be frozen, but said he expects Corbett to act by the end of December on a set of options.

He also warned of another painful budget for the 2012-13 fiscal year beginning July 1 in which Corbett would balance spending without raising taxes. But the state will have to find a way to pay for a projected $1 billion in growing health care, pension and debt costs, Zogby said.

"We want to make very clear that these are very difficult times, with very difficult choices in front of us," Zogby told reporters in a traditional midyear budget briefing in the Capitol.

Zogby said while many thought the current budget was difficult to balance, he said that "in many respects, 2012-13 is going to be an even more difficult challenge."

The current $27.2 billion budget for the 2011-12 fiscal year made deep cuts to education aid, held the line on human services costs despite rising demand for services, and did not raise taxes to cope with a drop in state revenues and the loss of federal stimulus money. It cut spending by 3 percent, lowered business taxes and carried $1 billion over into the new fiscal year.

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