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Senate Republicans OK spending plan
Tuesday, May 05, 2009

HARRISBURG -- The odds of getting a new state budget approved by July 1 took a nosedive yesterday, as Senate Republicans gave an initial OK to a $27.3 billion spending package that was immediately denounced by Gov. Ed Rendell, House and Senate Democrats, public education advocates, film industry supporters and others.

The Senate Appropriations Committee voted 16-10 along party lines to send the budget to the full Senate, which is controlled by Republicans and could vote as soon as tomorrow.

Democrats, who control the House, vowed strong opposition to what they called an "extreme" budget.

Sen. Jake Corman, R-Center, Appropriations Committee chairman, said the Legislature has no choice but to make many painful and difficult spending cuts to avoid raising taxes.

By June 30, the end of the current fiscal year, state revenues will probably fall $3 billion or more behind expectations, he said. The GOP budget combines $24.6 billion in state funds with $2.7 billion in federal stimulus funds.

The GOP budget "reflects the money we have to spend," he said. "We don't have enough money for everyone's programs. We couldn't justify asking the people of Pennsylvania for more taxes."

Mr. Rendell complained that Republicans had eliminated a $418 million increase in basic education funds that he had proposed in February. The GOP budget would use about $700 million in federal stimulus funds to hold basic education funding to the 2008-09 level.

Mr. Rendell insists that more money is needed for programs such as pre-kindergarten, child care services, the Science Is Elementary program and "dual enrollment," where high school students can take college courses.

He said the Republican budget "is a disaster for education." With inflation at about 3 percent, no funding increase would mean school districts actually would get less in fiscal 2009-10, he added.

"This an extremely mean budget. It goes beyond common sense," said Rep. Dwight Evans, D-Philadelphia and chairman of the House Appropriations Committee.

Officials of the Pennsylvania State Education Association and the Pennsylvania School Boards Association also were upset.

"School districts throughout the state are suffering lost revenues and increased costs," PSBA's Tim Allwein said. "School districts need state funds to prevent the need to increase the property tax burden on local property owners."

Mr. Corman insisted the GOP budget provided "a significant contribution to education. School districts aren't exempt during tough times. They have to make tough decisions."

Mr. Rendell in February proposed a $28.9 billion budget for the year starting July 1, using state and federal funds. He said yesterday he knows additional spending cuts have to be made, but not as much as the GOP wants to do.

While a Rendell spokesman, Chuck Ardo, said "nothing has been ruled out" in the effort to balance the budget, Mr. Rendell said he still thinks he won't need a general tax increase, such as a hike in the sales tax or personal income tax. He is proposing about $200 million in new or higher taxes on cigarettes, cigars, smokeless tobacco and natural gas taken from areas of Marcellus shale.

Mr. Rendell also was upset by proposed GOP reductions in the Department of Community and Economic Development, including a program that helps Pennsylvania companies increase exports overseas and an "opportunity grant program" that Nova Chemicals wants to use to build a new factory in Leetsdale, with several hundred jobs. The port of Pittsburgh funding would be cut by $812,000.

Also eliminated would be a DCED line item of $517,000 for marketing Pennsylvania as a place to make movies. Department spokesman Mark Shade said attracting movies to the state "is a proven, successful program."

The movie money "is one of 17 lines items in the DCED budget that Republicans have zeroed out," he said. "It's very short-sighted."

The GOP also wants to make a $250 million reduction in state tax credits for various programs. Film makers fear this will include cutting the $75 million in tax breaks that now goes to movie makers for films made here.

Movie makers said states are very competitive in trying to land new films, and doing away with the tax credit would hurt Pennsylvania and cost jobs.

Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.
First published on May 5, 2009 at 12:00 am
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