LIVE NOW: Rendell wants Pa. budget hike

February 4, 2009 8:57:06 AM PST
Pennsylvania Gov. Ed Rendell outlined a $29 billion budget Wednesday that would expand spending on education, prisons and health coverage while drawing from federal aid and state surpluses, increasing some taxes and cutting other programs.

You can get Highlights of Gov. Rendell's budget plan by Clicking Here.

The plan, a 2.5 percent increase from what was originally approved for the 2008-09 budget, also would draw hundreds of millions of dollars from the state's "rainy day" contingency fund without draining it completely.

It does not call for increasing any broad-based tax.

Many key proposals have trickled out in recent days, from adding a dime per pack to the cigarette tax to legalizing video poker machines and using the money generated to help thousands of college students pay tuition.

But in one previously undisclosed proposal sure to ignite debate, Rendell said he wants eliminate 400 of the state's 500 school districts to make public education more efficient. The state's basic education subsidy to schools would increase $300 million for the fiscal year that starts July 1.

The state also would add 2,400 beds in prisons and community corrections facilities.

The governor's budget returns to a policy priority that he has so far been unable to get through the Legislature: expansion of the state's adultBasic health coverage program. His plan would more than double the number of lower-income residents in the program to about 90,000.

He also revived a proposal to have the Department of Public Welfare buy pharmaceuticals directly from drug companies, eventually saving $146 million annually.

The budget includes new taxes on the extraction of natural gas from the Marcellus Shale formation and on previously untaxed tobacco products such as cigars, pipe tobacco and snuff.

In recent weeks Rendell and his aides have talked about a need for state government layoffs, and his budget would reduce the number of state jobs by nearly 3,000. Rendell spokesman Chuck Ardo said officials have not decided how many of those job cuts would be made through attrition and how many would be the result of layoffs.

Rendell proposed the creation of a new Cabinet-level agency, the Department of Emergency Management and Homeland Security.

The $753 million "rainy day" contingency fund would be reduced by $250 million during the current year to help cover a projected $2.3 billion falloff in state tax revenues. Another $375 million from the fund would be used to balance the 2009-10 spending plan.

The governor also asked the Legislature to kick in $175 million from its own reserves.

He said his budget would save $977 million by eliminating 101 line items and reducing another 346, but in previous years many such cuts were eventually stored by the Legislature during budget negotiations.

The governor's budget address is the first step in a monthslong haggling process that will determine what adjustments are needed to keep the budget balanced through mid-2010.

CLICK HERE to follow Action News on Twitter

CLICK HERE to get Action News on your website

CLICK HERE to find Action News on Facebook

Click here to get the latest Philadelphia news and headlines from across the Delaware and Lehigh valleys.


Load Comments