The Republican governor's second budget, which he calls "lean and demanding," largely picks up where the administration left off in year one. Corbett has pushed for a culture change to one of enterprise from one of entitlement.

Spending has been reduced to "fit the realities of our time," he said. "When you don't have enough to spend, you spend less."

The commonwealth is running a deficit of about $500 million and the shortfall is projected to be more than $700 million by the end of the fiscal year June 30.

The proposal would slash state-related universities by 30 percent, while the state system schools would be hit with a 20 percent reduction. Funding for K-12 remains level.

On the business side, the governor said he wants to continue the phase-out of the capital stock and franchise tax and maintain tax credit programs such as the research and development tax credit, job creation tax credit, film production tax credit and neighborhood assistance tax credit.

The capital stock and franchise tax would drop to 0.89 mills in January 2013 and be eliminated by January 2014. The R&D credit would remain at $55 million under Corbett's proposal.

Corbett said he wants to create new programs to support job creators and workers, such as Jobs First PA, which invests in small and large businesses, offering initiatives to cultivate and create new industries and jobs.

"Pennsylvania competes with every state in the union for factories, offices and corporate headquarters," Corbett said. "The shorter we make the journey from the drawing board to the ribbon cutting, the better our chances of growing jobs."

The governor also highlighted the Liberty Financing Authority as an economic development tool. The authority would combine nine existing authorities, funds and programs to create a single authority that would pool resources to attract additional federal and private sector funds.

"Pennsylvania is going in the right direction. We must not turn back now," Corbett said.

In addition, Corbett spoke of repairing the state's unemployment compensation system, which is about $4 billion in debt to the federal government.

"We hope that lawmakers will not only take steps to eliminate the debt to the federal government, but take action to restore this important safety net to its intended purpose," said Sam Denisco, vice president of government affairs at the Pennsylvania Chamber of Business and Industry.

Lancaster County Democratic Rep. Mike Sturla was among those critical of the governor for failing to adequately address transportation infrastructure funding, a top issue among businesses and lawmakers on both sides of the aisle.

"Without making important investments in our state's transit, we'll fail to attract new businesses," Sturla said. "We can't talk jobs without transportation."

Other lawmakers, including Cumberland County Republican Rep. Glen Grell, said they were disappointed Corbett didn't elaborate more on what he will support.

"It's time both sides come together," Grell said about transportation.

The governor's Transportation Funding Advisory Commission in August drew up proposals that would add about $2.5 billion for infrastructure over a five-year period.

Corbett said he is ready to work with lawmakers to address the transportation issue.

Senate Majority Leader Dominic Pileggi, R-Delaware County, and House Majority Leader Mike Turzai, R-Allegheny County, called it a no-frills budget that fits the times we're in.

Editor's note: This item was modified from its previous version to correct that the governor unveiled a $27.14 billion budget.