By Edith Honan
NEW YORK (Reuters) - Pennsylvania Governor Tom Corbett enacted a $27.15 billion state budget late on Thursday, which reduces spending more than $1 billion from the current fiscal year and includes severe cuts to higher and basic education.
Corbett, a Republican whose party controls both houses of the state legislature, signed the budget within an hour of Pennsylvania's midnight deadline for the 2012 fiscal year, which starts July 1.
The governor said the spending plan streamlines government, includes no tax increase and places limits on local property tax increases.
Any property tax increase above the rate of inflation must be approved by the local voters, the governor said.
"This reality-based budget marks a return to the Constitutional principles that must guide Pennsylvania's fiscal policy,'' Corbett said in a statement.
"It spends no more than we have and it doesn't pretend we have more than what we have budgeted."
The budget will largely shrink spending back to fiscal 2009 levels. Spending increases after 2009 were largely paid for by federal stimulus funds designed to help states emerge from the recession and which are no longer available.
The budget passed the legislature without support from the Democratic minority. Democratic legislators had pushed for the state to use some of its estimated $700 million surplus from increased revenue collection to decrease the cuts to school funding.
"These cuts are going to hurt people," Representative Frank Dermody, the Democratic House leader, said earlier this week. "And it's not like the money isn't there. The money is there."
The budget would cut about $860 million from public schools and scale back funding considerably for public universities, lawmakers said.
The state teachers union said the cuts would mean increasing class sizes, eliminating programs and laying off teachers, as well as forcing school districts to raise taxes.
Corbett is among a new class of Republican governors who have made a splash in states like Wisconsin, Ohio and Florida by calling for major cuts in government spending and tax breaks.
(Editing by Peter Bohan and Jerry Norton)