State furloughs 25,000 as budget deadlocks

Governor takes his energy tax off table; talks will resume today in Harrisburg

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Carolyn Kaster, Associated Press photos
Gov. Ed Rendell -- "We didn't start early enough. I think everybody was at fault."
Source: Governor's Office
By Tom Barnes and Tracie Mauriello
Post-Gazette Harrisburg Bureau

HARRISBURG -- Nearly 25,000 "nonessential" state employees were put on temporary furlough without pay at 12:01 a.m. today because Gov. Ed Rendell and Republican legislative leaders couldn't agree on a new 2007-08 state budget last night.

However, there was some good news late last night also. The decision to furlough the workers will not affect the state's five racetrack casinos, at least until a hearing tomorrow.

The state Gaming Control Board voted last night to close the casinos if Department of Revenue computer workers were furloughed with the other 25,000 workers. Those furloughs are going ahead, as per the governor's order, but casino lawyers were able, late last night, to get an order from Commonwealth Court to keep the casinos open until the hearing tomorrow. The casinos will make a request to remain permanently open regardless of how long the employee furloughs last.

Mr. Rendell, speaking to reporters at the Capitol at 11:15 p.m., said he regretted the layoffs but said hadn't yet been able to reach an agreement on a new budget for the fiscal year that is more than a week old. It began July 1, but the state doesn't yet have authority to spend money in the new fiscal year, so some workers had to be furloughed, he said.

"I sincerely hope it will be a one-day furlough, and I have reason to be optimistic," Mr. Rendell said. "To our hard-working and dedicated employees, I want to say I'm sorry we're here. We worked as hard as we could to get this [budget] done."

House Majority Leader Bill DeWeese, D-Waynesburg, said budget negotiators were "achingly close to a compromise."

But GOP leaders didn't sound as optimistic. Senate President Pro Tem Joe Scarnati, R-Jefferson, accused the governor of "continuing to use our state workers as pawns in a game. He's holding these workers hostage.''

House Republican leader Sam Smith said, "I feel bad that the governor is using the employees as a negotiating tool.''

Mr. Rendell said he had no choice but to lay off employees without pay because he could not say for certain that a deal was close enough to ensure there would be authority to pay them. Budget talks will resume today.

But Republicans, such as Rep. Mike Turzai of Bradford Woods, said they were standing up for their core principles.

"Legislators know people want controlled spending, no new taxes and no new borrowing. [The governor's] appetite for spending and borrowing has hit a brick wall," he said.

House Democrats stood up for the governor and blamed the furloughs on Republicans for playing partisan politics.

"This isn't about politics anymore," said Rep. Mike Gerber, D-Montgomery. "It's about who wins and who loses, and [Republicans] are willing to put 25,000 people out of work because they don't want to look like they lost to Ed Rendell."

Intense closed-door negotiations went on most of yesterday between Mr. Rendell and his staff and legislative leaders of both parties, in an effort to reach a deal on a new state budget of at least $27 billion for the fiscal year that started July 1.

Without a budget, Mr. Rendell has said the nearly 25,000 workers who aren't "essential for the health, welfare and safety of citizens" must be laid off without pay.

The furloughs include 13,000 Department of Transportation workers, such as those who work at driver's license centers.

Eight of those furloughed workers, computer operators in the Department of Revenue, aren't considered essential for health and safety, but they are vital to keeping the racetrack casinos open.

That's because they monitor the central computer control system in Harrisburg, which is linked electronically to the 10,000 slot machines around the state.

The system makes sure that no one has tampered with any of the gambling devices and ensures that the state gets its full 55 percent tax cut from gross gaming revenues.

Without those regulators on the job, state officials had said the casinos would have to close -- but Senior Commonwealth Court Judge Keith Quigley blocked that from happening, at least until tomorrow's hearing.

The furloughs mean that state parks and forests also closed at midnight.

Legislative budget negotiators said an agreement had basically been reached on the budget itself, but some side issues, such as House Bill 1201, the governor's ambitious energy independence plan, were holding things up.

Mr. Rendell's desire to borrow more for capital spending was another problem, Republicans said.

Sen. Jane Orie, R-McCandless, said the governor had agreed earlier in the day to take his proposed energy tax off the table for now. Initially, he said he would not sign a budget unless the Legislature also approved his energy, transportation and health-care plans.

"The energy tax is a dead idea," Ms. Orie said. "Energy independence is something we all want, but for now it will be something we'll wait on. It's my understanding that the governor has conceded to that."

He wants to impose a surcharge, or assessment, of $5.40 a year on homeowners' electricity bills in order to float $850 million in bonds to finance energy-efficient appliances and alternative forms of energy.

But Republicans denounced the idea as another tax, and are opposing it.

Several House Republicans called an informal news conference yesterday afternoon to say they oppose additional long-term borrowing, which the $850 million would be.

"I won't support another bond issue until I know how the money is going to be spent," said Rep. Carole Rubley, R-Chester.

Rep. Kate Harper, R-Montgomery, said the bill would permit the state "to go into the business of selling oil and gas. It's irresponsible for us to vote on this bill without knowing what we are getting ourselves into. We need to hold hearings on this bill."

Rep. Mario Civera, R-Delaware, said the House should simply approve the $27 billion budget plan approved by the Senate, so people don't have to be furloughed. He said legislators can come back at a later time to act on the energy bill.

An argument broke out on the floor of the House last evening, as some legislators tried to suspend House rules to speed discussion on a "stopgap budget," a temporary spending plan that would be in effect for up to a month. Passage of such a plan would avert the need for employee furloughs today.

"We came prepared to do a stopgap budget," said Rep. Ron Marsico, R-Dauphin. "We should be able to have a debate on the floor when the governor is talking about putting 25,000 people out of work."

Rep. Garth Everett, R-Lycoming, moved to suspend the rules, but Speaker Dennis O'Brien, R-Philadelphia, didn't agree with the move and recessed the House indefinitely.

Some Democratic legislators said a stopgap budget would have to sit on the calendar for three days before it could be passed, but others argued that the three-day rule could be suspended.

Rep. John Maher, R-Upper St. Clair, said, "We need to suspend the demagoguery. Real people are getting hurt while people talk about procedure."

House Majority Leader Bill DeWeese, D-Greene, right, and House Majority Whip Keith McCall, D-Carbon, talk after the Rules Committee meeting in Harrisburg yesterday.
Click photo for larger image.
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Tom Barnes can be reached at or 1-717-787-4254. Tracie Mauriello can be reached at or 1-717-787-2141.


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