At a signing ceremony Tuesday in Mechanicsburg, Gov. Ed Rendell said the budget does not increase taxes and clamps down on spending in response to a stubborn revenue slump that left last year's budget more than $1 billion in the red.
Rendell says deep spending cuts in some areas, such as social services, allowed for significant increases elsewhere, notably a 4.5 percent boost in spending for the state's public schools.
Hundreds of state employees are expected to be laid off as a result of the cuts.
The budget also contains hundreds of millions of dollars for projects to be picked by the governor and legislators.
