State budget satisfies both sides
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HARRISBURG -- The best part about the new $27.3 billion state budget proposal is that it lets everybody consider themselves winners.
State Sen. Vince Fumo, D-Philadelphia, said the compromise spending plan, which was announced Monday night, was "a win-win situation." Sen. Robert Mellow, D-Lackawanna, said it's "good news for all Pennsylvanians."
Gov. Ed Rendell claimed a victory by persuading legislators to agree to a $750 million package of aid for roads, bridges and mass transit for 2007-08, a total that grows to nearly $1 billion in several years. He also made progress on his health care plan by enlarging the scope of duties of nurse practitioners and dental hygienists.
While he didn't get as far on his "energy independence" plan as he'd wanted, he at least was able to call a special session on energy starting Sept. 17.
Senate President Pro Tem Joe Scarnati, R-Jefferson, was able to boast that Republicans had stuck to "our core principles" by blocking all seven of the tax and fee increases that Democrat Rendell had proposed in his February budget speech.
Republicans reluctantly agreed to spend more than the $27 billion that they'd been insisting on. But they resisted calls from some Democrats to hike the bottom line even more, and boasted that they killed what they termed the "Rendell energy tax."
That was a $5.40 annual surcharge (as the governor termed it) on residential electricity bills that would finance an $850 million energy bond issue that Mr. Rendell wanted. He said it would give buyers rebates on energy-efficient appliances. But Republicans said a bond issue is just another way to borrow money and complained the state does too much borrowing already.
Mr. Scarnati also was pleased that the new budget is only about 3.5 percent higher than the 2006-07 budget. Conservatives and business interests have been pushing to limit state spending growth to about 3 percent, or the rate of inflation, instead of the 5 percent to 6 percent growth there's been in recent years.
Legislators weren't the only ones glowing about the budget deal, which was delivered 10 days late and threw 24,000 state workers out of work for a day on Monday.
Pennsylvania Turnpike Commission members could boast about blocking the governor's plan to lease the turnpike to a private operator who would throw the commissioners out of a job. In fact, the commission will double its roadway authority when tolls are added to Interstate 80 in 2010.
Penguins fans could applaud a new slots-funded economic development fund that provides $7.5 million a year for the new hockey arena in Pittsburgh.
Smokers could light up at the news that Mr. Rendell had dropped his plan to increase the cigarette tax and impose the tax on cigars and smokeless tobacco.
Motorists were winners, at least temporarily, when legislators decided not to raise funds for transportation by increasing the gasoline tax. But that victory will be offset in 2009, when drivers who use the turnpike will begin paying 25 percent higher tolls and again in 2010 if the federal government gives the state permission to put toll booths on I-80.
Riders of buses and trolleys will gain from the additional state money dedicated to erase deficits at mass transit agencies.
Slots players were winners, sort of, when casinos flexed their muscles and fought state efforts to close them down on Monday, when 24,000 "nonessential" state workers were put on a one-day payless furlough.
And even those laid off workers were winners, in a sense. Legislators, especially those in the Harrisburg area, heard their howls of protest and cries that the workers were "innocent pawns" in the state budget game, which helped speed Monday night's compromise. Legislators are keenly aware that those laid-off workers (and their families and friends) could take their revenge next year when lawmakers seek re-election.
Of course, it's still too soon for everyone to pop the cork on the champagne bottle. The budget deal hasn't been put into writing yet, and the House and Senate won't actually vote on it until Friday or Saturday.
Much of the credit for the compromise goes to the state's economy, which is providing a healthy budget surplus for fiscal 2006-07, which ended June 30. When Mr. Rendell made his budget speech in early February, estimates put the surplus at only about $100 million for the fiscal year, a figure that exploded to $650 million by June 30.
That negated the need to increase the state sales tax from 6 percent to 7 percent statewide (and from 7 percent to 8 percent in Allegheny County), as Mr. Rendell had called for in his budget speech. Mr. Rendell was taking credit for his economic development policies causing the economy to do better than anticipated.
The burgeoning surplus also allowed for a $27.3 billion final budget. That's $300 million more than the budget approved by the GOP-controlled Senate in June. The rest of the surplus will roll over into the 2007-08 budget, part of it going into the "rainy day fund" for emergencies and the rest giving the state an immediate surplus.
Of course, nobody got everything they wanted, but that's the nature of give and take in budget talks. Mr. Rendell was forced to give up on two of his major proposals from February, the leasing of the turnpike and imposing a new tax on oil company profits.
The turnpike commission used its clout to persuade legislators to oppose the governor's privatization plan. As for the Rendell oil company tax, legislators feared it would simply be passed along to motorists in the form of higher gasoline taxes, which is the last thing politicians would want in this day of $3-a-gallon gas prices.
Mr. Rendell made some progress on his health care and energy independence plans, but not as much as he would have liked. He was forced to drop his $5.40 annual surcharge on residential electric bills. And he put off until fall a plan for a 3 percent payroll tax on companies that don't provide health insurance for their workers.
First Published July 10, 2007 11:09 pm
