Budget deal puts Pa. back in business

Agreement returns 23,562 furloughed workers to their jobs

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Jason Minick, Associated Press
Gov. Ed Rendell announces the budget deal last night in Harrisburg.
By Tracie Mauriello and Tom Barnes, Pittsburgh Post-Gazette

HARRISBURG -- The state is back in business after a one-day partial shut-down.

Gov. Ed Rendell announced last night that lawmakers reached a budget deal and 23,562 state employees would return to work this morning.

Mr. Rendell thanked Democrats, his own party, and even Republicans, with whom he's been feuding in recent days.

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"All sides can say they achieved some of their goals, and that's probably a good budget," Mr. Rendell said. "If you ride mass transit you're going to say this is a terrific budget.''

The budget was increased by $300 million, to a total of $27.3 billion, using funds from a $650 million surplus from last fiscal year. It includes funding for pre-school, all-day kindergarten and laptop computers in high school classrooms.

The budget still is subject to approval by the full House and Senate, which could take several days.

Last night's preliminary agreement was enough to bring employees back to work today because it gave the governor confidence a budget would soon be in place to give him authority to pay them.

Negotiations grew contentious over the last few days and became embroiled in a political tug-of-war that resulted in the furloughs and marathon negotiating sessions lasting 10 days into the new fiscal year.

At issue was insistence by the governor and House Democrats on side issues not directly related to the general fund.

Mr. Rendell yesterday dropped the most contentious of those, his proposed tax on electricity bills to pay off $850 million in bonds for energy conservation and production of alternative fuels.

However, he announced he's calling a special legislative session on the energy issue starting Sept. 17. Republicans consented to a special session even though they strongly opposed his "energy tax.''

Meanwhile, the GOP compromised on plans to increase funding for transportation, including additional aid for the Port Authority of Allegheny County.

And in an important matter for Pittsburgh, legislators agreed to a new slots-funded economic development program that will help finance a new $300 million hockey arena in Pittsburgh.

"That's important,'' Mr. Rendell said, "because it allows the Penguins to move into their new arena on schedule and not fall a year behind.''

Another major point of the budget settlement is that slots players can rest easy. The casinos are no longer in danger of closing because of furloughed workers in the Revenue Department.

There was to be a court hearing this morning aimed at keeping casinos open, 'but that's moot now,'' Mr. Rendell said.

Senate President Pro Tem Joe Scarnati of Jefferson, who had clashed repeatedly with the Democratic governor in recent days, said the budget is one he can live with.

"There were seven taxes originally proposed by the governor for this budget and now there are none," he said.

Mr. Rendell in recent days has dropped his plan to increase the sales tax by 1 percentage point statewide; his plan for a 3 percent tax on businesses that don't offer health insurance; his plan for a higher cigarette tax and his so-called energy tax.

Mr. Rendell suffered another setback on his proposed Jonas Salk Legacy Fund, a $500 million bond issue to fund construction of biotech and biomedical clinics around the state. The measure had passed the House but was stuck in the Senate, which is controlled by the GOP. Senators agreed to consider the idea again in the fall.

Other Republicans, meanwhile, continued to criticize the governor for using state employees as pawns to get his policies passed.

"We refused to be in a position where we would simply pass legislation unrelated to the budget based on the pressure of a budget deadline, but instead to give that legislation -- important as it is -- the careful consideration it needed so it would be more affected," said Senate Majority Leader Dominic Pileggi, R-Chester.

Yesterday was the first time in Pennsylvania history that state employees were furloughed without pay. Without giving specifics, Mr. Rendell said efforts would be made to compensate them for their day off without pay, which cost workers a total of $3.5 million.

The budget agreement is also good news for people who use state parks, which were closed to campers and swimmers yesterday, the hottest day so far this year, because there were no rangers or lifeguards to supervise them.

Elsewhere in the state yesterday no drivers' license tests were administered, no state bids were awarded and no contractors were paid.

Employees involved in what the governor called "essential health, safety and welfare jobs," such as state police and prison guards, did work yesterday.

The closed-door budget talks ended a day of partisan bickering throughout the Capitol.

The state House was supposed to convene at 1 p.m. yesterday, but Democrats, who control the chamber, failed to show up on the House floor. Their last floor debate ended abruptly Sunday night when Speaker Dennis O'Brien -- a Philadelphia Republican who nearly always votes with Democrats -- stormed off and declared the House to be "in recess.''

Throughout the day yesterday, Republicans and Democrats differed on what "side issues'' remained in the way of a budget deal.

One sticking point was whether the Senate and House would enact a smoking ban in workplaces before recessing for the summer. A watered-down bill has passed the Senate, but Rep. Michael Gerber, D-Montgomery, wants to make it more restrictive when the bill comes up for debate today.

The Senate also must act on a school bill that may allow the Education Department to reassign students from the now-closed Duquesne High School.

Tracie Mauriello can be reached at tmauriello@post-gazette.com or 717-787-2141. Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.


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