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Rendell to Cabinet: Cut $500 million
This is on top of the $1 billion in reductions in the governor's
February budget proposal. It could mean more job cuts.
Thursday, June 18, 2009
BY JAN MURPHY jmurphy@patriot-news.com
One day after calling for increasing the state's personal income
tax, Gov. Ed Rendell spread more bad news.
On Wednesday, he called on his Cabinet to cut $500 million to help
bring his 2009-10 state budget proposal into balance.
Republican legislative leaders indicated the cuts, which hit education
and welfare the hardest, wouldn't go deep enough. They want to avoid
the governor's call for raising the 3.07 percent personal income
tax to 3.57 percent.
Rendell's latest budget proposal sets spending at $28.9 billion,
which is the same level he proposed in February. Republicans have
called that level unrealistic, given next year's stagnant revenue
projections.
The level represents an increase of nearly 4 percent over this
year's $27.8 billion budget, which had to be reduced midyear to
help deal with the state's $3.2 billion revenue shortfall.
"I expected his total spending would be $28.5 billion or $28.6
billion," said Senate Majority Leader Dominic Pileggi, R-Delaware
County. "The cuts have been completely overbalanced by additional
spending."
Administration officials indicated that several issues offset the
latest cuts that Rendell is proposing. Those included lower-than-expected
federal aid and higher-than-expected costs for tax refunds and programs
for the poor and elderly.
With 13 days to go until the state's budget deadline, Pileggi grew
more pessimistic about getting a budget on time. He said Rendell's
latest budget proposal won't be fully fleshed out and made available
to lawmakers until next week.
"I don't see how the governor's second budget is moving us
closer toward a resolution," Pileggi said.
Rendell's emergency Cabinet meeting was opened to the press and
a Democratic staffer, while others were turned away. The governor
shared a list that told each Cabinet member how much more they had
to cut on top of the $1 billion in cuts that he built into his February
budget. His top aides will meet individually with Cabinet members
to review his suggested places to cut, he said.
The proposed cuts include $60 million from general government operations,
$2 million from the county fairs, $3 million from state parks and
state forest operations, and $14 million for mental health/mental
retardation. Administration officials declined to provide the detailed
list on Wednesday.
Rendell's plan relies on taxing cigars and smokeless tobacco and
natural-gas drillers and raising cigarette taxes. He also called
for delaying the continued phaseout of the capital stock and franchise
tax until 2012. He said that action would not "hurt businesses
one iota."
He said the personal income tax increase is not inconsequential,
but he proposed that the rate go back to its current level in three
years.
The general government cuts Rendell proposed likely mean more job
reductions beyond the anticipated elimination of 2,600 through attrition
and layoffs that were included in Rendell's February budget proposal.
But David Fillman, executive director of Council 13 of the American
Federation of State, County and Municipal Employees, said he has
not received any indication that will be the case.
Fillman is hopeful agencies look to cut spending on contractors
and consultants instead.
Education Secretary Gerald Zahorchak said his department has been
ordered to take $212 million in cuts, so he anticipates that likely
will include cutting some positions as well as programs.
"This is tough," he said.
To save $22 million, Rendell has recommended axing his "Classrooms
for the Future" technology program. Zahorchak indicated that
was hard to swallow. On a positive note, he indicated the governor
has drawn the line at cutting the basic education funding for schools
and early childhood education funding below the level recommended
in February.
"Every single sector in America is facing pay cuts and dealing
with cuts in spending, and it seems the education community is the
only one that doesn't want to," said Steve Miskin, a spokesman
for House Republican Leader Sam Smith, R-Jefferson County.
In the welfare budget, Rendell said cutting funding for
mental-health and mental-retardation programs is "going to
be a painful and a hurtful cut for people, but we got to do this."
Welfare Secretary Estelle Richman agreed.
Commenting on the $106 million that she must cut, she said,
"It's going to be painful. If people prefer pain to taxes,
they're going to get pain."
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