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Wagner sides with GOP on budget

HARRISBURG — Auditor General Jack Wagner, a Democrat, is backing House Republicans on two key points in budget negotiations: The state shouldn’t spend $500 million in unanticipated revenue, and it’s valid to expect more than $400 million in welfare savings.

In facing a $4.2 billion deficit, House Republicans and Gov. Tom Corbett, a Republican, have contended that $540 million extra coming in by the end of the fiscal year June 30 should be kept in reserves.

Citing continuing uncertainties in the economy and outstanding state obligations, Wagner told reporters on Thursday, “I think Gov. Corbett is right” to say most of the surplus should be reserved.

On Wednesday, House Democrats issued a statement criticizing Republicans for proceeding with budget cuts when there’s a “surplus.”

Bill Patton, a House Democratic spokesman, was undeterred by Wagner’s remarks.

“The large surplus is real and growing,” Patton said. “The taxpayers of Pennsylvania produced this surplus, and yet the taxpayers are the ones hurt most by the proposed Republican cuts to education and health care.”

Meanwhile, said House GOP spokesman Stephen Miskin, “We think the auditor general is exactly on target.”

“He knows firsthand the liabilities facing the Commonwealth and that when you have billions of dollars in liabilities, you can’t have a surplus.”

Wagner, at a news conference on tobacco fund expenditures, said he would not call it a surplus with billions due on unemployment compensation, spiking pension liabilities and an open labor contract for state workers under negotiation with unions.

As for the projected welfare savings, most of which are based on his audits, Wagner said he believes the savings are achievable if legislation is enacted along with administrative changes within the department.

Much of the savings would stem from reducing errors in the Medicaid program.

Wagner said he opposes using any tobacco settlement money for a loan fund proposed by Corbett. At least a portion of the tobacco endowment would be shifted to the proposed fund for economic development, Wagner said. Corbett’s aides say the money would remain invested for health care purposes.

But Wagner said there just isn’t enough information publicly available on the proposed fund to make solid judgments.

Steven Kratz, press secretary for the Department of Community and Economic Development, said legislation creating the Liberty Financing Authority will be introduced. He said the authority will “promote economic development and job creation.”


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