Gov. Ed Rendell's motto for his 2008-09 budget seems to be, "If at first you don't succeed, try, try again."

His $28.3 billion General Fund proposal is a tribute to persistence because it puts back on the table important initiatives that were left in the to-do pile last year, notably the governor's health insurance plan, Cover All Pennsylvanians, and his Energy Independence Strategy.

In both of these programs Pennsylvania has an opportunity to lead the nation and fill the void left by inadequate answers at the federal level to the questions of how to provide decent health care for all citizens and reduce the nation's reliance on foreign fuels. It would have been a mistake for the governor to abandon these lofty goals despite inaction from the Legislature so far, especially since he has sound ways to pay for them.

The two other major components of the budget are a combination of old and new, aimed at solving the long-standing challenge of fairly funding local schools (while reducing the burden on local taxpayers) and preparing the state for what are expected to be difficult economic times ahead.

• The governor's health insurance plan would provide coverage for the state's uninsured, paying for it with a combination of a 10-cent increase on each pack of cigarettes sold, imposition of a tax on other tobacco products and tapping a surplus in a state fund that helps doctors pay their medical malpractice insurance.

• His energy plan combines incentives for conservation with $850 million of investments in promising technology for solar, wind and other clean options, which could make the state a major player in this emerging field. It would give families the right to smart meters that allow variable rates for electrical use at peak and off-peak times and rebates for switching to efficient air conditioners and refrigerators. Businesses could sign longer-term contracts with utilities, giving them stability. A statewide survey of likely voters last year showed overwhelming support for the plan even though it would require a surcharge on electric bills that would average 45 cents a month for residential customers. In other words, Pennsylvanians are willing to pay their share.

• Basic education funding for school districts would increase by 5.9 percent, a higher proportion than in recent years, so the state can reverse its declining role in spending, which has only increased the burden on local taxpayers. Longer term, Mr. Rendell intends to address the lack of equity in how Pennsylvania pays for its schools, which currently leaves the quality of too many educations dependent on the price of a community's real estate. He is proposing a new funding formula -- the first change since 1991 -- that accounts for myriad cost factors including enrollment declines, students in poverty and those who must learn English, and preschool preparation. While the governor sees this as a six-year process, he must guarantee that the extra state funding produces better programs, not higher salaries.

• In crafting a state economic stimulus package, Gov. Rendell admits to following Washington's lead with a proposed payment of up to $400 each for thousands of lower-income families. His budget contains a long list of programs aimed at generating jobs and growth, particularly a third attempt at the Jonas Salk Fund, which would invest $500 million in new laboratories and equipment, building on the state's success in biotechnology, pharmaceuticals and medical research. But we're not convinced about the $400 payments. Why does the governor think it's wise to borrow from the state's Rainy Day Fund to pay for them, given his own estimate that rain is in the economic forecast?

We also wonder why Mr. Rendell is proposing a drop in the 2.89-mill capital stock and franchise tax to only 2.49 mills, when it was scheduled to fall to 1.89. Businesses say the change will cost them $40 million, yet with a projected state surplus of $427 million by the end of June it appears Pennsylvania could afford the deeper cut.

Last year, the governor's budget exceeded his grasp and the result was extended bartering with the Legislature and too many items left undone. This plan is more cautious and realistic, reducing the number of new programs and tax increases to pay for them. But the Legislature is largely unchanged since last year and that, coupled with questions about the effectiveness of the House Democratic leadership, may portend the same unsatisfactory conclusion as with the previous budget.

Overall, Gov. Rendell has hit the right balance. He is not asking for too much, but he is offering plenty of ways, as he put it, to protect Pennsylvania's progress while preparing for difficult times ahead.