Having more money than you thought is generally a good thing.



But in the state budget talks, a surplus is emerging as one of the biggest hurdles.





It may seem unfathomable given all the discussion of the state’s financial crisis. Nonetheless,

.

Lawmakers and Gov.

have different ideas on what to do with it.

Some lawmakers — including Republican leaders — say some of that surplus could be used to avoid highly unpopular decisions in the 2011-12 budget. Some money could go to public schools and colleges, which face steep cuts in state aid in Corbett’s budget.

However, Corbett said last week that he is holding firm to his $27.3 billion budget for 2011-12. “We’re not moving it up,” Corbett told a crowd of business representatives.

He doesn’t want to tap the surplus, because he says the state is facing a $4.2 billion deficit next year.

The governor’s budget called for no tax increase. It included close to $2 billion in

, along with a host of other spending cuts.

Lawmakers recognize some spending reductions are unavoidable for next year. They will go along with much of what Corbett proposed.

Senate Republicans and Democrats in both the House and Senate think next year’s budget could be nudged a little closer toward this year’s $28 billion spending level.

House Republicans don’t want to exceed $27.3 billion, although they are willing to shift more money to education.

Republicans and Democrats share one high priority: restoring some of Corbett’s proposed 54 percent cut to the Pennsylvania State System of Higher Education. The system’s 14 universities include Shippensburg and Millersville.

Lawmakers also want smaller cuts to school districts, the four state-related universities (Penn State, Pittsburgh, Temple and Lincoln), hospitals, and social services.

Through April, state tax collections are running $506 million ahead of expectations. Corbett’s budget estimated a year-end surplus of $78 million, and he proposed using it to balance his budget for next year.

Corbett said any surplus exceeding $78 million could go into rebuilding the state’s Rainy Day Fund to help with revenue shortfalls in future years. Or he said it could go toward reducing the state’s debt.

There is even talk at the Capitol about returning some of the surplus back to taxpayers in the form of a tax cut.

Senate President Pro Tempore Joe Scarnati, R-Jefferson County, looks at the pain caused by Corbett’s funding cuts to schools and hospitals and suggests that some of the surplus could be tapped.

The Senate is also looking to move Scarnati’s bill to shift $75 million to $100 million in legislative reserves into the state’s general fund.

“We don’t want to spend more than [this] year,” Scarnati said. “We’re not going to raise taxes. We’re not going to spend more than we can sustain next year. But it’s pretty tough with a straight face to look at all these cuts and put $600 million in the bank.”

Sitting on a hefty year-end surplus would be irresponsible, because cuts for schools and social services will likely translate into higher property taxes, said state Rep. Joseph Markosek, D- Allegheny.

The size of the state’s surplus is more than enough to restore the state’s adultBasic program to provide health insurance to low-income adults, said Rep. Dan Frankel, D-Allegheny. The

ran out of money earlier this year.

If state revenues are showing a $505 million surplus this year, the administration should be anticipating double that amount next year, said House Democratic Leader Frank Dermody, D-Allegheny.

“This new money is already in the state’s pocket. Republicans would rather pretend it’s not there,” said Dermody. “It is beyond comprehension to deny budget relief to millions of people when the state has the money in hand.”

Republican leaders in the GOP-controlled House plan to unveil a budget this week that maintains the level of spending that Corbett proposed.

But they propose shifting money around to put about $620 million more into basic and higher education than Corbett proposed, and cutting money from welfare programs, according to a House Republican source.

For Corbett, sticking to his guns on spending is crucial to his campaign commitment to trim the size of government, said G. Terry Madonna, a political scientist from Franklin & Marshall College in Lancaster.

“This is a test of whether he means what he says when he talks about government having a spending problem,” Madonna said. “This will tell us much about what his next three years will be like.”

While lawmakers and governor differ on their appetite for spending, all sides seem to agree that the state budget must get done on time this year after eight years of missing the June 30 deadline.

Failure to do so comes at their own peril, Madonna said.

Republicans, who hold a majority in both chambers along with the governor’s office, might bear a greater portion of the blame from the public. But he said voters would likely blame the entire Legislature.

“My sense is a late budget will be a plague on both their houses,” Madonna said.