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Rendell and GOP far apart on budget solutions
Thursday, May 28, 2009

With just 34 days left to produce the state's 2009-10 budget on time, Democratic Gov. Ed Rendell and legislative Republicans continued sniping at each other yesterday.

And while Mr. Rendell was still pushing for some smaller tax increases, he was hopeful that a "broad-based" tax increase, such as a higher sales tax or personal income tax, could be avoided.

Speaking at a bridge rehabilitation project in Beaver County yesterday, Mr. Rendell said that next week he will offer "several hundred million dollars" in additional spending cuts in an effort to balance the new state budget without a broad-based tax increase.

Mr. Rendell and Senate Republicans have been $1.7 billion apart on their competing budget plans. Mr. Rendell had suggested $29 billion in combined state-federal spending for the fiscal year starting July 1, while the Senate has approved, along party lines, a $27.3 billion, no-tax-increase budget. Republicans want the Democrat-controlled House to vote on the Senate budget, but no vote has been scheduled.

"The people of Pennsylvania are waiting," GOP senators said in a news release yesterday. "To date, the House has not done the hard work of developing and moving a full proposal that the people of Pennsylvania can review and react to."

Mr. Rendell yesterday continued to assail the Senate GOP spending plan, calling it "a non-starter" and "ridiculous." In recent days, groups representing county officials, hospital and nursing home officials, child care services and others have complained about "disastrous" effects of GOP spending cuts.

Republican legislators said that with state revenues at least $3 billion below expectations, spending cuts are mandatory.

The governor declined to give details about the additional spending cuts he will propose next week, but said they would balance the budget without requiring an increase in the personal income tax or other major levies.

"Right now, I don't think so," he said, when asked if an income tax increase was possible. But he agreed state revenues continue to fall short of expectations.

Mr. Rendell repeated his call for a tax on smokeless tobacco products and cigars, saying Pennsylvania is the only state without such a levy.

"It would be crazy not to tax that. The public supports it," he said. He also wants to increase the state's cigarette tax by 10 cents per pack.

He also said the state should tax natural gas drawn from the Marcellus shale formations in the state. He said such a levy in West Virginia has not diminished gas production.

Mr. Rendell won't call for major cuts in economic development programs or the state's program to accelerate repairs of structurally deficient bridges. Under the Senate-passed budget, he said, "Every economic development program is eviscerated."

He said the government's first job "is getting people back to work. ... We need to reduce our spending overall. We can't cut economic development."

Asked if a budget could be passed by the June 30 deadline, Mr. Rendell said: "I have no idea. We haven't done it in my six years as governor because partisanship has reigned."

Meanwhile, the administration and Republicans clashed yesterday on the state's Children's Health Insurance Program, which Mr. Rendell wants to increase by $8 million next year, but Republicans want to keep at this year's level.

There are now 193,000 children enrolled, but Insurance Commissioner Joel Ario fears that number could decrease by 12,000, through attrition, without additional funding; when youths turn 18 they must leave the program. Failure to provide additional state aid could also cost the state nearly $17 million in federal CHIP aid, he said, and could cause a waiting list to form for the first time in years.

"When you think about the payoff of children getting the coverage they need early in life and succeeding, and all the benefits that gives to society, this is not one of the programs that ought to be a target for the budget-cutting process," he said.

Senate Republicans defended their proposal to keep CHIP at its 2008-09 level. Senate GOP spokesman Erik Arneson said that if a waiting list develops, a supplemental budget bill could be passed.

Sen. Don White, R-Indiana, said, "It is disappointing, but hardly surprising, that the CHIP program is being treated by the governor like a poker chip in his high-stakes game to increase spending."

Pennsylvania Legislative Correspondents Association intern Nick Pipitone contributed. Jon Schmitz can be reached at jschmitz@post-gazette.com or 412-263-1448. Harrisburg Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.
First published on May 28, 2009 at 12:00 am
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