Pennsylvania's legislative leaders charge staff with developing a draft budget by next week

Published: Wednesday, June 16, 2010, 11:50 PM     Updated: Thursday, June 17, 2010, 12:00 AM
KARI ANDREN, The Patriot-News

Gov. Ed Rendell warned that government employee layoffs, including teachers, could come as early as July without Medicaid assistance money from the federal government.

Rendell proposed a $29 billion spending plan that includes an extra $850 million in Medicaid assistance money from the federal government. The governor previously said that many layoffs could occur without the federal money, but Wednesday marked the first time he put a timetable on when layoffs could happen.

The governor said he and legislative leaders called off plans to meet Wednesday afternoon to negotiate the budget in favor of waiting until staff members can frame a starting point.

After a pair of meetings Wednesday among legislative leaders, lawmakers charged their staffs with working together to develop a draft state budget that could provide the framework for a final budget agreement.

“Our collective staffs of all four caucuses were given the direction to work together between now and early next week to develop a spending plan that is in the ballpark of what a final agreement might look like,” said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, R-Delaware County.
Arneson said that spending plan will reflect the revenue that will be available for the 2010-11 fiscal year that begins July 1. Lawmakers have generally agreed revenues will be around $27.5 billion if no taxes are increased or added or other revenue sources added.

Arneson said that no hard spending figure was set, but that it will be significantly below Rendell’s proposal.
“Depending how that work goes ... Monday or Tuesday could be a real marker,” Arneson said. “You could get to a point on Monday or Tuesday where you have a real sense of, are we on the right track to getting this done on June 30 or are we into July?”

Rendell said the staffs will have to figure out if the $29 billion spending plan he sent them “is doable, and if there are additional cuts, what those cuts would be, or what revenue enhancements we need to make.”

The state faces a roughly $1.2 billion deficit, a number that could rise if the federal government does not send Pennsylvania the $850 million in Medicaid money that Rendell is counting on. Rendell maintains confidence that Congress will approve that money and wants lawmakers to build it into next year’s budget.

Governor discusses future of tax bill

By Kimberly Hess (Junr 16, 2010)
 
Governor Ed Rendell this evening met with reporters to discuss a pronouncement by Rep. Dwight Evans (D-Philadelphia) that the tax bill under debate on the House Floor was recommitted to the House Appropriations Committee at the governor’s request. The governor explained that his senior staff was following the floor debate and it was clear that the bill, HB 325, which would levy taxes on natural gas extraction and various tobacco products, did not have enough support to pass the House.
 
Governor Rendell commented if it were April, he may have urged the chamber to work out the differences and move the bill, but with a budget deadline only two weeks away he concluded it would be best to reach an agreement among all five parties before holding a vote on increased taxes. He suggested this has been the practice in the past. He noted there is wide support for the components of the revenue bill, but Democratic leadership could not round up a majority of votes for the package as a whole.
 
The governor rejected Republican suggestions that savings could be found by eliminating waste and fraud in the Department of Public Welfare, as detailed in an audit by Auditor General Jack Wagner. He pointed to awards that the department has won as evidence that this suggested $300 million in waste is not a reality. Governor Rendell also asked reporters to ask those who call for cuts to provide a list of suggested cuts. He commented, “They are political pitchmen” until proponents of cuts instead of taxes provide a list. However, he indicated negotiating cuts to education is not on the table for him. The governor promised to make himself available as long as it takes to reach an agreement.
 
The governor reported that he will be meeting with legislative leaders tomorrow to discuss the budget. This would be the first such meeting in eight days. Governor Rendell stated he has made himself available daily for discussions. He commented that he does not expect an agreement to come from tomorrow’s meeting, but he does anticipate each side will come out of the meeting with “assignments” to work toward. He declined to say just how far apart the sides are.
 
On other topics, Governor Rendell reported if enhanced FMAP is not enacted by Congress before PA enacts the budget, he will begin to put money into budgetary reserve until the FMAP is enacted. He remained optimistic, noting that the US Senate is currently debating the issue now. He stated opposition comes from Republicans and Blue Dog Democrats, who are looking for it to be fully funded. It is currently only partially funded.
 
Regarding the tax amnesty program, which ends in two days, he reported PA has collected $144 million as of this afternoon. He said he has meetings planned for stepped up enforcement and will make information on scofflaws available “fairly soon.”