Fiscal year begins with no Pa. budget

July 1, 2009 5:22:13 AM PDT
Pennsylvania is beginning the 2009-10 fiscal year with no budget in place, and a curtailed authority to spend money. The first day of the new fiscal year is Wednesday, and partisan stalemate in Harrisburg appears to be entrenched.

Budget talks are particularly difficult this year because Gov. Ed Rendell and lawmakers are grappling with a multibillion-dollar deficit brought on by the recession. High-level talks Monday and Tuesday yielded no substantial progress.

Rendell, a Democrat, is proposing more than $2 billion in higher taxes, including a three-year, 16 percent jump in the personal income tax.

Republicans who control the Senate firmly oppose any tax increase and are focused on spending cuts that line up with the state's lackluster tax collections.

No deal is in sight, but Rendell says Pennsylvania residents won't notice a dropoff in state services for now.

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