EmailEmail
PrintPrint
Rendell's proposals assailed
Republicans don't think spending cuts are sufficient
Thursday, February 05, 2009

HARRISBURG -- If Gov. Ed Rendell was expecting a burst of kudos from legislators over his proposed $29 billion budget for the fiscal year that starts July 1, he had to be sorely disappointed.

Only two lines in his 75-minute budget speech got any real applause -- thanking troops for their military service and congratulating the Steelers for winning their sixth Super Bowl. He called them "the premier franchise in the history of the National Football League."

Mr. Rendell said he worked hard to trim state spending in fiscal 2009-10 to $26.6 billion. Republicans said he's also projecting another $2.4 billion in federal funds, even though so far there's no guarantee as to how much the state will get.

With the federal spending added, the new budget is more than the $28.3 billion 2008-09 budget that was originally enacted for the fiscal year that ends June 30. That plan has now been shaved to $27.8 billion by cuts Mr. Rendell has made in recent weeks, as state revenues took a sharp dive.

Republicans said that even with more than $1 billion in cuts in state spending, the proposed 2009-10 package was still too much.

"Spending would increase by $700 million" from the original 2008-09 budget, said House Republican leader Sam Smith of Punxsutawney. "That isn't a tightening of our belt. It's really letting a few links out."

He also thinks the budget is too dependent on money from the proposed federal economic stimulus program.

"That's only good for the next two years, and we'll be in the hole" in future years unless the Legislature makes additional cuts.

Rep. Mike Turzai, R-Bradford Woods, complained that Mr. Rendell "wants to increase spending and increase taxes when there is plenty of fat in that budget. Everyone knows it." He said community revitalization grants, sometimes called "walking around money," and welfare spending are two areas that could be cut.

Mr. Rendell got more audible scoffs than praise when he outlined his controversial plan to put thousands of video poker machines in bars to generate tuition aid for state college students. Some GOP legislators vigorously disputed Mr. Rendell's contention that this wasn't an expansion of legalized gaming.

Mr. Rendell thinks $550 million for college tuition aid could result from allowing up to five video poker machines in each of the state's 20,000 bars, taverns, clubs and restaurants.

"This expansion of gambling is an ill-conceived notion," said Sen. Jane Orie, R-McCandless.

The governor replied, "Video poker now exists [illegally in bars]. We, the taxpayers, aren't getting one dime from it. Let's get revenues for students to go to college."

As for legislators who oppose the idea, he said, "They haven't heard yet from Pennsylvania families" who need college aid.

The governor did get some praise for not halting the ongoing phaseout of a tax on businesses' assets, and for not trying to increase "broad-based taxes," such as the sales tax and the personal income tax.

But Republicans criticized him for smaller tax increases, such as a 10-cent per pack increase in the $1.35-per-pack cigarette tax, a new tax on cigars and smokeless tobacco, and a surcharge on the millions of dollars worth of natural gas to be extracted from the Marcellus shale areas of the state. He thinks those moves could generate about $200 million.

House Democratic Whip Bill DeWeese of Waynesburg said West Virginia, Texas and Louisiana impose such gas extraction taxes and they make sense.

"Marcellus shale deposits are rich and teeming under Pennsylvania's earth," he said.

There was muted response to the governor's unexpected proposal to give counties the OK to levy a sales tax of up to 1 percent in addition to the 6 percent state sales tax. (Allegheny and Philadelphia counties, which now have a 7 percent levy, would be excluded.) The county commissioners association wants new taxing options so they can lower property taxes.

"We should do more to help cities and counties address their budget challenges," Mr. Rendell said. He said counties could share half the sales tax proceeds "with our hard-pressed cities."

There also was little comment on another controversial Rendell idea -- to create a commission to study the idea of merging the existing 501 school districts into just 100 statewide. The study, if approved by legislators, would take a year, so nothing is imminent, but legislators know that combining school districts is political dynamite.

While some legislators wanted more cuts, others criticized Mr. Rendell for the reductions he suggested, such as saving $1 billion a year by wiping out 100 programs for fiscal 2009-10 and making cuts in another 300 programs.

The zeroed-out programs included a school for young children in Franklin County, a school for the deaf in Scranton and the popular Governor's Schools of Excellence.

Senate Democratic leader Bob Mellow of Scranton, normally a Rendell supporter, blasted the closing of the school in his district, calling it "misguided and short-sighted."

"While I do not dispute the need to make substantive government cuts in these very difficult economic times, the governor's budget proposal would hurt the most vulnerable among us," he said.

Mr. Rendell said, "Nobody likes cuts but they are inescapable, and have to be made."

The state's 78,000-person workforce could be trimmed by 2,600, either through layoffs or attrition, but Mr. Rendell didn't have an exact figure for layoffs. From 300 to 900 people would be laid off if the Legislature approves the elimination of the 100 programs.

More layoffs could be avoided if unions would agree to delay 3 percent raises, now set for July, until January, he said, but so far they have refused.

Leaders of the three largest unions representing state employees addressed reporters after the budget presentation. They sported big green buttons reading "Whine -- Scream -- Holler." That was a blunt response to Mr. Rendell's often-repeated statement that he didn't want to hear any whining about budget cuts.

"We will whine, we will holler and we will scream," said Kathy Jellison, president of the Service Employees International Union Local 668. "This is exactly the wrong time for government to be making cuts or laying off workers who provide essential services" such as processing unemployment compensation checks and providing drug and alcohol counseling.

Only a few areas of the budget were increased in the Rendell budget. He proposed an additional $300 million for public schools (pre-kindergarten through grade 12). More money was proposed for the Corrections Department, where the population of the 27 state prisons is expected to rise from 49,000 to 56,000 over the next few years.

Mr. Rendell also proposed doubling, to 90,000, the number of people getting state-subsidized health insurance in a program called Adult Basic. More than half the $250 million annual cost would be covered by federal Medicaid funds. Right now, he said, "We're leaving that money on the table."

But consumer advocates said adding 45,000 people to Adult Basic "falls far short of the need," since there are almost 200,000 on a waiting list, and almost 900,000 adults in the state without health insurance. "Getting insurance to these individuals should be a top priority for the General Assembly," the PA Health Access Network said.

There will be much debate in the next five months on the budget. The Legislature has to pass a final version by July 1.

Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254. Tracie Mauriello can be reached at tmauriello@post-gazette.com or 717-787-2141.
First published on February 5, 2009 at 12:00 am