The winners and losers in Pa.'s budget battle

HARRISBURG - As the first week of a new fiscal year came to a close Friday, Gov. Corbett still had a decision to make: whether or not to sign the $29.1 billion spending plan that doesn't include one of his top policy priorities - overhauling the state pension system.

Corbett could sign or veto the plan - or do nothing and let it automatically take effect. For the governor, facing a difficult reelection in the fall, every option carries risk.

But few emerged unscathed from the annual budget tussle, one that ended with some extra dollars flowing to public education and a new per-pack cigarette tax in Philadelphia to help the city's ailing schools.

From Republicans in the House to their colleagues in the Senate, most left Harrisburg with items on their wish list not checked off.

"It's hard to define clear winners here," said Chris Borick, a pollster and political science professor at Muhlenberg College in Allentown.

Here's a look at how key players fared:

Desperately needing to score points for his reelection bid, the governor appears to have ended up with a mixed bag.

For starters, he deliberately stepped away from his 2010 campaign promise to deliver on-time budgets. He did so because he wanted to give the legislature time to agree on a bill he favors to move all new state and public school employees into a hybrid pension plan.

For Corbett, overhauling pensions has become a rallying cry.

After watching a proposal he backed appear to wither in the House, the governor got a glimmer of hope Wednesday when House members, in one of their final acts of the summer, moved the bill back in position for a vote.

But the earliest that vote could come will be in the fall. And losing that battle in the heart of the campaign season could only compound the governor's problems.

The Democratic nominee for governor was silent and out of sight - and will probably reap the rewards.

Wolf can head into the fall campaign claiming the week highlighted the dysfunction or ineffectiveness of his opponent and Republicans. It also doesn't hurt that the latest poll among registered voters showed the Democrat with a 22-point lead over the incumbent governor.

The Republicans in the lower chamber have never been an easy group to unify, particularly on controversial votes.

That split was on full display with the pension bill, sponsored by Rep. Mike Tobash (R., Schuylkill) and backed by Corbett. Many moderate Republicans, particularly from the southeastern part of the state, had balked at supporting it because they didn't want to alienate public-sector unions - or their more moderate constituents.

The bill ended up moving back in position for a floor vote only after the House's more conservative - and antitax - GOP leaders agreed to bring up for a vote a measure allowing Philadelphia to impose a $2-per-pack tax on cigarettes.

In the end, not only did House Republican leaders grudgingly find themselves signing off on the cigarette tax for Philadelphia; they still couldn't muster the votes to pass the pension before leaving for the summer.

One of the few winners to emerge from the budget season, the beleaguered school system is positioned to get a major cash infusion from the cigarette tax: just over $80 million in the first full year. It also averts 1,300 layoffs and seeing class sizes swell to at least 40.

Still, the cigarette tax does not cover the district's entire $93 million budget gap for the coming school year, and even in the best-case scenario, city schools will be funded at the level they were this past term - a level that is "wholly inadequate," as School Reform Commission Chairman Bill Green terms it.

Schools seem likely to open on time, but many still won't have full-time counselors or nurses, or adequate supplies.

Mayor Nutter and members of Philadelphia's statehouse delegation, led by Rep. Cherelle Parker, championed the cigarette tax and lobbied hard for its passage. And they got their way, as the Senate is expected to approve the measure this week and Corbett has said he will sign it.

The clear losers, of course, are Philadelphia smokers who have to pay $2 more for an already pricey product. The hike also could damage neighborhood retailers, while benefiting stores in bordering towns such as Cheltenham and Bala Cynwyd.

The city projects revenue from the tax to dwindle over the years, as the levy causes people to quit, buy cigarettes outside the city, or turn to the black market.

For a while, it seemed as if the legislature was seriously considering a new severance tax on natural gas extraction from the Marcellus Shale. Republicans who control the Senate wanted to raise new revenue for the budget - and knew a new severance tax could have raised hundreds of millions of dollars. But Corbett, who campaigned four years ago on a no-tax pledge, was less than enthusiastic about it, as were House Republicans.

The idea died before it got any real traction, which could be a boon for the gas companies - as long as the Republicans maintain control of the governor's mansion and legislature.

If nothing else, the cigarette tax created unlikely allies.

Late Wednesday night, just minutes after the successful Philadelphia cigarette-tax vote, House leaders gathered for a news conference in the Capitol Rotunda.

There, in an unusual photo op, were Nutter and Parker flanked by Republican Rep. Mike Turzai, the House majority leader, and other lawmakers from both parties.

In a partisan political climate, few could remember such a high-profile show of cross-aisle teamwork in recent years. There were compliments and backslapping all around, along with a hopeful note that was sounded by Parker: "No matter who's governor in November," she said, "we will all still be here together."

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Inquirer staff writers Kristen A. Graham and Troy Graham contributed to this article.