HARRISBURG -- A lot of "budget hostages" -- most of the state's 77,000 employees -- are being released.
But now some legislators are complaining that Gov. Ed Rendell is creating a whole new group of budget hostages, including the 14 state-owned universities, the 14 community colleges, counties, libraries, day care centers and hospitals, all of which face an extended delay in getting their annual allotment of state funding.
"County-based services, such as drug and alcohol programs, mental health and retardation programs and child day care programs, plus the bulk of public education funds, will be among the new hostages," said House Republican leader Sam Smith of Punxsutawney.
Mr. Rendell yesterday signed a partial state budget for 2009-10, which permits spending $11 billion. That will allow all but about 1,600 state workers to finally get paid for the days they have worked since July 1, the start of the new fiscal year.
But Mr. Rendell vetoed an even greater amount of proposed spending -- $13 billion, including money for the State System of Higher Education, community colleges, K-12 public schools, library subsidies, child care programs, senior citizen services, rape crisis centers, domestic violence programs, adult probation, county courts, academic medical centers, school district health services, autism programs and homeless shelters.
"I am not signing a true budget today," he told reporters. "I am signing legislation that will let us pay state workers and preserve core state services for public safety and welfare. Our workers deserve to be paid and this bill will allow that."
But he remains dissatisfied with the bill he signed, Senate Bill 850. It totals $27.3 billion, but the governor maintains that it still needs $1.7 billion in additional revenue to be in balance. Senate Bill 850 is considerably lower than the $28.2 billion spending package that Mr. Rendell favors for fiscal 2009-10. He is adamant that some type of recurring revenue, either from the sales tax or the income tax, is needed to balance the budget, but Republicans disagree.
Mr. Rendell admitted that many recipients of state funds will be upset that he "blue-lined" their annual appropriations. These include the state's 500 school districts, the 67 counties, veterans programs and the Pennsylvania Higher Education Assistance Agency, which makes grants and loans to college students. Mr. Rendell even blue-lined the entire $288 million appropriation for the Legislature this year, but it can still make payments from a reserve fund of at least $100 million left over from previous years.
He disagreed that he was creating new "budget hostages," but did admit he is trying to "put pressure on the General Assembly to give us a meaningful budget."
"I am not trying to win political points," he said. "I want funds preserved for education, so young people can succeed, and funds preserved for health care."
He said the GOP-created Senate Bill 850 doesn't provide enough for vital state services such as kindergarten through grade 12, higher education and health care. He wants to provide an additional $300 million to $418 million for basic education this year, but Senate Republicans are opposed.
The governor urged the six-member bipartisan House-Senate conference committee on the budget to get back to work on crafting an acceptable budget. The panel will meet at 1 p.m. today, House leaders said, but agreement on a complete budget totaling $27 billion to $28 billion could still be weeks away.
In addition to the $24 billion in state funds for fiscal 2009-10, the state expects about $2.4 billion in federal stimulus funds and an undetermined amount of revenue from sources such as the $750 million Rainy Day Fund, a $700 million surplus in a fund that pays for doctors' malpractice premiums, a delay in phasing out a tax on businesses' assets, a new tax on natural gas and/or higher tobacco taxes.
While Mr. Rendell insists that more recurring revenue is needed to balance the 2009-10 budget, the GOP says now isn't the time for a tax increase, with the recession hurting many people. The Legislature has refused to consider Mr. Rendell's call for an income tax increase, so he said it's up to lawmakers to find new revenue.
About 1,600 state workers won't get back pay through the bill that Mr. Rendell signed yesterday. Workers for the Public Utility Commission, the state Gaming Control Board, and two pension funds, one for retired state workers and one for retired teachers, will be paid using different bills, which passed the House yesterday but still need Senate action.
Also yesterday, a citizens group called Common Cause called for major changes in the delay-ridden state budget process, which has failed to produce a complete budget by July 1 for seven straight years.
"This budget crisis is causing real harm to Pennsylvania and its people, businesses and to government itself," said the group's leader, Barry Kauffman. Legislators "should fix the system so these budget fiascoes are unlikely to ever happen again."
Joined by the League of Women Voters, he called for a system of "mandatory budget deadlines." The House and Senate would have to approve parts of the budget so that a final product is completed by each July 1. There would be financial penalties for missing deadlines.
