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Rendell challenges Republicans to balance budget without tax hike
Friday, July 03, 2009

HARRISBURG -- The Rendell administration says it's tired of seeing Republican lawmakers standing on the sidelines and throwing grenades at the governor's proposal for a 2009-10 state budget.

So Democrats are "challenging" Republicans to come up with a balanced budget alternative of their own "and we'll take a look at it," Steve Crawford, Gov. Ed Rendell's chief of staff, said yesterday.

"If they think they can balance a budget without new taxes, let them show it to us," he told reporters. "So far, the governor is the only one who has produced a balanced budget."

Mr. Crawford claimed that GOP legislators "are taking the easy way out" by criticizing Mr. Rendell's $28.8 billion budget plan for the fiscal year that started Wednesday. It's balanced with a 16 percent increase in the personal income tax and several other new or higher taxes, along with some spending cuts.

Mr. Rendell doesn't think it's possible to produce a "balanced, responsible budget" that provides adequate state services without some higher taxes. His most controversial idea is boosting the income tax to 3.57 percent for the next three years. Even many Democratic lawmakers are having trouble supporting that idea, fearing constituent anger.

Mr. Crawford said that Senate Bill 850 -- a $27.3 billion budget plan which the Republican-controlled Senate approved May 6 on a party-line vote -- is now $1.5 billion out of balance because of a continuing dropoff in state tax revenues.

Republicans have said they won't even consider hiking the income tax or other taxes, saying that's the wrong thing to do in a recession. Mr. Crawford said then it's up to Republicans to show how a budget can be balanced using only spending reductions.

Erik Arneson, an aide to Senate GOP Leader Dominic Pileggi, issued his own challenge. "If the governor and House Democratic leaders will agree to the principles in Senate Bill 850, we believe we could work out the final details to bring it into balance very quickly," he said.

Those principles, he said, are "no tax increases and spending at a level below that of 2008-09," which was about $27.7 billion. That's $1.1 billion less than Mr. Rendell wants to spend in 2009-10.

Mr. Arneson said Senate Bill 850 could be balanced by combining additional spending cuts and some one-time revenues, such as the $750 million Rainy Day Fund, a $700 million account to pay for medical malpractice premiums and money from leasing more land for natural gas drilling.

Meanwhile, state workers are worried about working without pay during the budget standoff. Some judicial workers will feel the loss of salary starting today, while most workers won't begin to be affected until July 17, when part or all of their two-week paychecks will be withheld if the budget hasn't been settled. Legislators themselves were supposed to get their monthly checks on Wednesday but didn't.

Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.
First published on July 3, 2009 at 12:22 am