HARRISBURG -- The nursing home industry is calling on the Department of Public Welfare to sharply increase Medical Assistance payments for low-income senior citizens who live in nursing homes and assisted-living facilities.

Gov. Ed Rendell's proposed $28.3 billion budget "contains no increase for the nursing home care" of poor seniors, who make up at least two-thirds of the population of most Pennsylvania nursing homes, complained Anne Wantz, chief operating officer of the Pennsylvania Health Care Association.

The "flat funding" proposed for the fiscal year beginning July 1 comes on top of underpayments of $290 million to nursing homes over the past three years, Ms. Wantz told a news conference at the state Capitol yesterday.

The 2008-09 budget calls for a reimbursement of $4,321 per Medical Assistance resident, the same as last year, critics said.

"This is not only disappointing, but incredibly disheartening," she said. She contended that DPW should "pay for the reasonable cost of care for nursing home residents on Medical Assistance," a state program that corresponds to the federal Medicaid program.

Sister Judith Maroni, of Villa St. Joseph nursing home in Beaver County, said labor, food and material costs rise yearly for nursing homes, while state reimbursements "for the care delivered in nursing homes do not meet the cost of providing that care."

Ron Barth, president of PANPHA, a group that represents 360 nonprofit nursing homes and assisted-living facilities, said the governor "expects nursing home residents and their families, who pay for their own care, to pay extra -- a hidden tax, if you will -- to make up the shortfall of the Medicaid rate.

"It is hard to believe there is simply 'no money' in this [new] budget for an increase for frail seniors," he said, when the governor is proposing "extras like $110 million for laptops," referring to Mr. Rendell's Computers in the Classroom program for high school students.

Debate on the new state budget is just starting. Many hearings remain to be held, and many changes are made each year to the governor's proposal before a final budget is adopted.

The criticism leveled yesterday that Democrat Rendell isn't spending enough on nursing homes comes on top of criticism by Republicans that he is spending too much. His proposed budget shows a 4.2 percent increase over the current budget.

John Michael Hall, DPW's deputy secretary for the Office of Long-Term Living, said it's prudent to budget conservatively, given the signs of a recession.

"We are trying to set spending at a place that is consistent with the means of Pennsylvania taxpayers," he added.

In past years, he said, "nursing homes have gotten increases to their budget, not as much as they want, but increases. We have to figure out how we take care of everybody."