Jun 16, 2014 2 min read

Pennsylvania lawmakers have entered what is supposed to be the final two-week push to pass a state budget – with Gov. Tom Corbett’s $29.4 billion spending plan potentially out of balance by nearly $2 billion.

If ways cannot be found to erase the revenue shortfall – through budget savings or tax increases – spending would have to be scaled back.

Here’s a look at key areas of focus in the budget debate:

Corbett backs a House plan to create a new hybrid pension plan for most future public employees that is expected to save more than $10 billion over 30 years. Democrats favor leaving the pension system alone.

The bill would combine a limited traditional, defined-benefit pension with a 401(k)-style defined-contribution plan to provide a smaller benefit than current employees receive.

The House passed a Corbett-backed privatization bill last year that would have phased out the 600 state liquor stores and generated more than $1 billion in one-time fees by allowing the sale of more than 2,000 new wine and liquor licenses.

The bill, staunchly opposed by state employee unions, went nowhere in the Senate. That chamber’s efforts to cobble together an alternative have focused on liberalizing the sale of wine and beer while retaining the state stores as Pennsylvania’s only liquor retailer and maintaining state control over wholesale purchasing. Democrats oppose the bills.

Tax collections have lagged projections in recent months. The result, said both the Corbett administration and legislative analysts, is a potential shortfall of at least $1.2 billion over two years.

Other budget-related developments could push the total toward $2 billion. They include the possible rejection by the Legislature of Corbett’s plan to postpone $170 million in public pension payments; a possibly adverse court ruling on the transfer of $190 million from the Oil and Gas Lease Fund; and revenues from a new tax on small games of chance in bars coming in $75 million lower than projected.