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Legislature returns to a peck of trouble
Tuesday, January 06, 2009

HARRISBURG -- If state legislators stop to consider all the headaches they'll soon be facing, they might wonder why they ever ran for office.

Fifty senators and 203 House members will be sworn into office today for the General Assembly's 2009-10 session, and one continuing trouble spot is sure to be the state's rising budget deficit. Over the weekend Gov. Ed Rendell upped his deficit estimate by $100 million, to $1.7 billion by the end of the current fiscal year June 30.

State tax revenues continue to slide. At the end of December, they were almost $815 million less than what was projected when the 2008-09 budget was approved in July.

"Paraphrasing Thomas Paine, these will clearly be 'the times that try legislators' souls,'" quipped political analyst Charlie Gerow of Quantum Communications. "If members are coming here looking only for popularity, they'll be disappointed. This has the potential to be a tough session."

Mr. Rendell already has imposed a hiring freeze, banned out-of-state travel and car purchases, canceled raises for 13,000 nonunion workers and ordered his departments to trim their budgets by about 4 percent.

To balance the budget, state legislators will have to decide whether to tap the state's $750 million "rainy day" cushion and whether to use some of the $200 million surplus in the General Assembly's budget reserve account.

Republicans, including Lt. Gov./Senate President Pro Tem Joe Scarnati of Jefferson County, have spoken against tax increases as a way to erase the deficit.

It's still possible that incoming President Barack Obama could provide significant new federal revenue to Pennsylvania, perhaps $450 million for fiscal 2008-09. But even with such aid, more painful cuts in state programs are likely.

Besides the fiscal woes, the continuing Bonusgate probe could pose problems for some legislators. Attorney General Tom Corbett has spent two years investigating whether taxpayer-funded bonuses were illegally paid to legislative staffers for political work in 2006.

So far, 12 people, all former House Democrats or staffers, have been charged, but Mr. Corbett has hinted that additional charges are likely, perhaps among Republicans.

Other legislative hot spots will be high school graduation exams, electricity costs, expansion of health insurance and road/bridge repairs. Some Republicans and local school boards have criticized Mr. Rendell's plan to develop proficiency tests that high school students would have to pass before they could receive diplomas.

Republicans say now isn't the time to embark on costly new programs of questionable value, like the proposed Graduation Competency Assessments. The GOP said it could cost the state at least $40 million to design the new tests for math, English, social studies and science. Local school districts would have to spend additional money to implement them.

A big pocketbook issue is soon-to-expire caps on electric rates. The caps, which have held rates steady for 10 years, will come off in January 2010 or 2011 for several Pennsylvania companies, and residential electric rates could rise 30 to 50 percent for many customers.

Legislators are talking about mitigation methods, including phasing out the caps over several years rather than all at once, as now planned.

"We should offer a higher level of protection to utility customers to help them through this difficult period," said Sen. Jim Ferlo, D-Highland Park.

And then there's the health insurance quagmire. For two years, Mr. Rendell has failed to persuade Republicans to expand health insurance to people who don't have it. He has reduced the scope of his program, from one costing $1 billion a year and covering several hundred thousand uninsured to a more modest plan covering about 200,000.

But so far the GOP hasn't budged in its opposition.

The thorny issue of transportation funding also is still around. Legislators must find new ways to raise millions to repair miles of deteriorating highways and thousands of deficient bridges and aid transit agencies like the Port Authority and Philadelphia's SEPTA.

Act 44 of 2007 authorized the Pennsylvania Turnpike Commission to borrow $2.5 billion from July 2007 to June 2010 for upgrading roads, bridges and transit. The law also authorized a 25 percent increase in turnpike tolls, which took effect Sunday and is expected to generate $450 million a year for transportation needs.

But a state Transportation Department report in late 2006 estimated that $1.7 billion a year would be needed for all the transportation work and the higher turnpike tolls won't be nearly enough. Mr. Gerow thinks legislators may take a second look at Mr. Rendell's desire to lease the turnpike to a private operator, an idea that hasn't generated much support so far.

New federal assistance through Mr. Obama's economic stimulus program could help.

Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 1-717-787-4254.
First published on January 6, 2009 at 12:00 am
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