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Senate approves version of budget
Thursday, May 07, 2009

HARRISBURG -- The political rancor and divisiveness exhibited by state senators of both parties yesterday may not bode well for adoption of a new state budget by June 30.

After more than three hours of wrangling, the Republican-controlled state Senate voted 30-20, strictly along party lines, to approve a bare-bones $27.3 billion budget proposed by GOP Senate leaders.

"We all know that Pennsylvania has been hard hit by the national economic crisis," said Republican leader Dominic Pileggi, R-Delaware. "Our state revenues are significantly lagging," he said, noting that he expects a $2.9 billion shortfall by June 30, the end of the fiscal year.

The GOP budget, which now goes to the Democrat-controlled House, relies on $24.6 billion in state revenue plus $2.7 billion in federal stimulus money.

Changes in the budget are almost guaranteed, since it is significantly different from a $28.9 billion budget proposed by Democratic Gov. Ed Rendell and House Democrats. That budget relies on $26.2 billion in state revenue and the same amount of federal money.

Mr. Rendell has said his spending plan can be reduced by about $250 million, but that still leaves a gap of more than $1 billion between it and the GOP spending proposal for the fiscal year starting July 1.

Legislators and the governor haven't reached an agreement on a new budget by the July 1 deadline since Mr. Rendell became governor in 2003 and this year could be even more difficult.

Democratic senators attacked the GOP spending plan.

"It cuts funding for the state's top two industries, agriculture and tourism," said Senate Democratic leader Bob Mellow of Lackawanna.

State Sen. Jay Costa, D-Forest Hills, said the Department of Community and Economic Development, which has many job-creation programs, would be especially hurt, dropping from a $564 million budget this year to only $193 million in 2009-10. This includes elimination of funds for the state film office, many ports around the state, museums and zoos.

The GOP budget would "hurt constituents who need government the most -- the poor, elderly, the young and those with physical and mental challenges," said Sen. Jim Ferlo, D-Highland Park. "It would decimate funding for the arts, public television and community revitalization."

Mr. Rendell's budget included several sources of additional revenue, all of which were rejected by Republicans. The governor proposed using $375 million in "rainy day funds;" $107 million from a natural gas severance tax on natural gas from the Marcellus shale deposits; $61 million from an increased cigarette tax; $38 million from a new tax on cigars and smokeless tobacco; and a portion of the $700 million surplus in a fund that pays doctors' malpractice insurance claims.

Sen. Jake Corman, R-Center, said the rainy day fund should be left intact for future years, because federal stimulus funds only will last for two years. He said the GOP budget calls for a 10 percent cut in the Legislature's own budget (reducing it to $293 million) and includes $100 million from the legislative budget reserves (the so-called slush fund of $200 million).

He disputed Democratic claims that Republicans are shortchanging public schools. While the GOP budget rejected Mr. Rendell's call for a $418 million increase in the basic education subsidy, it does include $728 million in federal stimulus funds to keep school funding level with fiscal 2008-09.

With additional federal money going directly to school districts, they will get an overall increase in funds, Mr. Corman maintained.

But Democrats countered that if the state doesn't provide additional funds for school districts, they will have to raise their local property taxes, which will end up hurting homeowners.

Harrisburg Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.
First published on May 7, 2009 at 12:00 am
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