Fixing a hole: The Rendell plan relies on cuts, hope and the feds
Share with others:
Most Pennsylvanians can understand what Gov. Ed Rendell was up against as he put together his proposed budget for the 2009-10 fiscal year. Just as for many families doing their own financial planning, a little trim here and a little tweak there are not going to be enough.
The governor was dealing with a $2.3 billion hole, the result of lower-than-projected tax revenue, and he relied on some new sources of money, some optimism, some real cuts and some sleight of hand to balance his $29 billion budget.
•
The good news is there is no increase in the state's income or sales taxes, and Mr. Rendell continued the rollback in the business capital stock and franchise tax. We've long favored his attempt, renewed in this budget, to raise the cigarette tax by 10 cents a pack and start taxing smokeless tobacco, as most states do. A new natural gas levy would allow the state to benefit from the rich vein of Marcellus Shale that runs under Pennsylvania, but whether 5 percent is the right figure remains to be seen.
On the tax front, we don't think any good will come from his idea to let counties impose an additional 1 percent sales tax, as Allegheny County and Philadelphia already do. Those hit hardest by sales taxes are the poorest residents who can least afford an increase, and allowing the decision on a county-by-county basis doesn't change that. In addition, the power seems likely to create unnecessary competition among neighboring counties.
Now, about that optimism. An estimated $2.4 billion in Mr. Rendell's budget is anticipated new federal dollars that the state would get under the economic stimulus package that was passed by the U.S. House but has not cleared the Senate.
He also is hoping the Legislature will give up $175 million from its own surplus and approve spending another $375 million from the state's Rainy Day fund. We're hoping that optimism will be rewarded, but we don't share his rose-colored view that the state should raise $550 million for college tuition aid by legalizing video poker machines.
The entire budget is not built on hope, however, which brings us to the cuts. The governor trimmed $977 million off expenditures in the 2008-09 budget. In all, 346 different state programs were cut -- locally affecting the Carnegie Museum of Natural History and the Carnegie Science Center, the Children's Institute, the University of Pittsburgh and the Poison Control Center among them.
Mr. Rendell made a point of mentioning that $365 million of the savings came by eliminating 101 line items. Which brings us to the sleight of hand. Some of the items are new to the chopping block -- including the Governor's Schools of Excellence, some 4H Club and dairy shows, public television and the Police on Patrol program that paid three years' salary for new municipal officers.
But most of them -- $263 million worth -- were cut from the governor's budget last year, too, only to have the funding restored by legislators. We can't help but wonder if the governor really expects these cuts to hold or if he saw them as safe ways to save money on paper, with little expectation that they'll actually be wiped out.
What would be eliminated are 2,995 state jobs, through a combination of layoffs and the elimination of vacant positions.
The only departments to see funding increases are education, public welfare, corrections and probation and parole. That means state prisons would be staffed at levels that are safe and that improvements enacted last year for basic education funding will continue, sending an extra $262 million to the state's classrooms. That is all to the good.
The governor also would expand health care coverage for children and adults. The Cover All Kids program, with a $46 million budget increase, will be able to insure 23,480 more youngsters. And the popular AdultBasic plan, which now covers 40,000 people, would be extended to 90,000 and add prescription drug coverage. That would enable the state to tap into federal funds that have been left on the table in prior years.
•
It's likely that the official budget, set to take effect on July 1, will look far different from this proposal. But the governor has taken solid steps on several fronts, while leaving other areas for negotiation with the Legislature and for completion by Washington. Faced with a $2.3 billion deficit, Pennsylvanians can only hope that all parties are willing to cooperate.
First Published February 6, 2009 12:00 am
