PHILADELPHIA -- Pennsylvania collected 8.4 percent more revenue than expected last month, but outgoing Gov. Ed Rendell said his Republican successor will still face tough decisions on budget cuts as the state faces a projected $4 billion deficit.
The state collected $2.3 billion for December, or about $176.9 million more than expected -- and 15.5 percent more than in December 2009. Collections rose in nearly all major tax categories and, halfway through the fiscal year, the state has collected a total of $11.5 billion -- or about 1.7 percent more than anticipated.
Despite those rosier collections figures, the Democratic governor said he expects Gov.-elect Tom Corbett -- the state's current attorney general -- will have difficult decisions to make about budget cuts at a time when pension, Medicaid and corrections costs are all rising.
"Does General Corbett, when he becomes governor, have to make cuts? Of course he does," Mr. Rendell said. "Were I beginning a third term, I would have to make cuts."
But those cuts, he said, should be balanced so that the state can protect education funding and preserve gains made in education over his time in office. Mr. Rendell could not run again because he was term-limited.
Mr. Corbett, who was elected in November, will be inaugurated Jan. 18. His spokesman, Kevin Harley, said no part of the budget will escape review as he looks for ways to save money.
"There's going to be some difficult decisions," Mr. Harley said. "The entire budget from top to bottom, every agency, will be reviewed to find cost savings, including the education department."
Mr. Rendell, a two-term governor and former Philadelphia mayor, said he doesn't think Mr. Corbett's plan to privatize the state's liquor stores is a panacea for a budget deficit that is expected to be at least $4 billion -- one-seventh of this year's $28 billion budget.
"It's not a solution to our deficit problem," he said, adding that money generated by the sale of the state's liquor stores would be a one-time profit.
With Mr. Corbett's pledge not to hike taxes, Mr. Rendell said he will likely have to find other ways to generate and save money.
"A fee is a three-letter word. And tax is a three-letter word," Mr. Rendell said. "There's no silver bullet here and it's going to be very difficult."
But Mr. Harley countered that a dramatic increase in spending -- rather than declines in revenue -- has been the biggest part of the financial problem under Mr. Rendell.
First Published: January 4, 2011, 5:00 a.m.