The state Senate's proposed budget, authored by the majority Republicans, would gut key programs aimed at business retention and job creation, Pennsylvania's acting secretary of community and economic development said yesterday.

George E. Cornelius, head of the DCED, visited the Post-Gazette yesterday to discuss the Senate's version of the budget and the Rendell administration's business and development priorities.

"Some in the Republican Senate believe if you cut taxes enough and government goes away, great things will happen," Mr. Cornelius said. "Why do they think that? Where's the evidence to support that?"

Mr. Cornelius is an appointee of Democratic Gov. Ed Rendell and is in line to become the secretary of the DCED, dropping the word "acting" from his title.

He took issue with several of the cuts in the Senate budget, including big cuts to the filmmaking industry, tourism advertising, the DCED office that promotes trade and exports, and the Ben Franklin Technology Partners, an entrepreneurial support outfit.

All of those budgetary line items affect the people on the bottom, whose jobs rely on this funding, he said.

"If we're going to come out of this recession with some spring, and be prepared [for growth], it requires that investment."

On the issue of new taxes, Mr. Cornelius said Pennsylvania should tax smokeless tobacco products such as snuff and cigars, as well as natural gas extraction.

"Obviously they don't want a tax," he said of the oil and gas industry. "But they fully expect it ... that revenue is desperately needed if we're going to invest in things like alternative energy."

He also said that Pittsburgh -- though saddled with historic debts and poor infrastructure, which make it more expensive to operate than its suburbs -- has not been aggressive enough when it comes to paying down its pension obligations.

"I think the city's done a good job in the short term," he said. But "we have municipality after municipality across this state, including Pittsburgh obviously, [that] has shirked its responsibility to do any type of planning ... there's a big unfunded liability that can only be met one way, and that's putting more cash in."

The DCED is the state agency that oversees the Act 47 process, a recovery program for distressed cities.

Being an Act 47 city means Pittsburgh cedes some of its budget planning authority to the state's Act 47 team.