Rendell Says New Budget Will Result In Pain

At a press conference this afternoon, Gov. Rendell said the new $28 billion General Fund budget (just $182 million more than last year) will mean more cuts for state agencies and programs.
As examples of the pain, Gov. Rendell cited: an additional 11.7 percent cut in the Department of Agriculture, an additional 9.2 percent cut in the Department of Environmental Protection and an additional 11 percent cut in the Department of Conservation and Natural Resources (specifically an additional cut of 7.3 percent in State Parks).
This year's budget cut 26.7 percent from DEP and 18.5 percent from DCNR which means over the last two years DEP's budget was cut 35.9 percent and DCNR was cut 29.5 percent.
The Governor said the cuts will require about 1,000 layoffs of state workers, although the numbers are still being worked through given the line item numbers.
The FY 2009-10 budget cuts required DEP and DCNR to furlough or eliminate 333 full time positions and DCNR had to eliminate or reduce hours for 1,131 seasonal workers.
The Governor said he would be setting up a special commission over the summer to start work immediately on adoption of a natural gas protection severance tax, which under the agreement is to be adopted by October 1 with the new tax to start January 1.
He also said he would be calling another special session on transportation funding and is planning to meet with legislative leaders to go over revenue options on July 20.
The Governor also said he was pleased RCAP capital budget funding was extended and economic development funding was not cut as significantly as was earlier feared.
He expressed disappointment at not getting agreement on new or increased tobacco taxes and getting rid of the business discount for submitting the Sales Tax. He also said there were some transfers from several special funds to help balance the budget, but details were not yet announced.
He said June revenues should be above estimates by $20-$30 million and an additional $45 million was brought in under tax amnesty. FY 2009-10 should close out with a $1.2 billion deficit, he said.
The budget numbers do assume Pennsylvania will receive all or a portion of the $850 million in federal Medicaid funding with an understanding adjustments will be made later if needed.
If the Senate and House act tomorrow, this will be the first "on-time" budget in the 8 years of the Rendell Administration.
This information should be considered preliminary until the final information is released by legislative leaders.