Gov. Rendell said he will sign a sharply scaled-back budget early next week that will allow most state employees to be paid - but will not provide billions in funding for education, health care and human services.

The governor stressed that his action is only a temporary solution to the state's budget impasse, which has now entered its fifth week. He said he still holds out hope that a permanent agreement on a spending plan can be found soon. A joint conference committee of House and Senate leaders is meeting today and over the next few days to try to hammer out a deal.

But if the committee makes little progress on reaching an agreement by early next week, Rendell said he will sign the temporary budget to keep essential government operations running.

"I want to make it clear, this is not a final budget," Rendell told reporters at a news conference in the Capitol this afternoon of the temporary measure he intends to sign next week. "This is a bridge. It is a very important bridge ... This is a way to get our state employees paid."

Roughly 77,000 state workers have received partial paychecks over the last two weeks, and the first batch of those employees are to have a "payless payday" this Friday. No payments to vendors have been made this month.

The deadline to pass a budget was July 1. Without an enacted spending plan, the state operates under a diminished capacity to spend money.

The temporary budget Rendell would sign next week would allow the majority of workers to get paid, as well as receive backpay, likely by the second week in August.

But that budget would not provide funding to schools, counties and hospitals, or grants for the arts or state fairs. Those funding questions would be addressed as the administration and the legislature continue negotiations on a final spending plan for the state.

The Rendell administration has been fighting with Republicans in the legislature for months over the best way to balance a budget in recessionary times.

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So today is the first meeting of the much-ballyhooed savior of the state's budget-crisis: the joint conference committee.

The six-member committee of House and Senate legislative leaders is charged with coming up with a solution to the now 29-day-old budget impasse.

But they've spent the last 50 minutes arguing about when to meet, where to meet, and whether the committee should have a single chairman or be co-chaired.

So much for setting the tenor for negotiations.

Oh wait! There's movement! They have decided NOT to name House Appropriations chair Dwight Evans (D., Phila.) chairman of the committee....That is progress in Harrisburg.

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Ken Snyder, a senior advisor to Gov. Rendell, will assume duties as the governor's lead spokesman beginning tomorrow. 

Gov. Rendell's press secretary, Chuck Ardo, had originally informed the governor's office that he would be retiring after a budget deal was struck.

With no budget deal on the horizon, Ardo, 62, said today he was stepping aside to allow for "consistency of message" through the budget process. "It's the beginning of the transition process," said Ardo, who will remain in the press office handling non-budget matters until he retires at the end of August.

Ardo said Snyder's appointment is a temporary assignment until a permanent press secretary is hired. Rendell came under fire in March for hiring Snyder on a $100,000 contract to handle publicity for federal stimulus funding during a government hiring freeze. Snyder, 43, Philadelphia-based media consultant and political strategist, said he will continue to be paid $9,060 a month until his contract expires Jan. 31.

Snyder has a long resume, having done public-relations and political-campaign work for high-profile public officials including Rendell, former Mayor John F. Street, and former State Sen. Vincent J. Fumo.

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That was the chant of the day from more than 1,500 state workers, who gathered on the Capitol steps during their lunch breaks today to protest the fact that they are being asked to work without pay during the state's budget impasse.

The workers, who were bused in from all corners of the state, shouted slogans, hoisted signs and donned orange arm bands, hoping that Gov. Rendell and lawmakers inside the building would hear their pleas to pass a budget so that they can resume getting paid.

"Twenty-eight days without a budget is a crime," shouted David R. Fillman, executive director of Council 13 of the American Federation of State, County and Municipal Employees, whipping up the crowd. "It's unethical and it's inexcusable."

Because of the impasse, the state is operating under a diminished capacity to spend money - and that includes paying roughly 77,000 of its employees.

All the 77,000 workers have received partial paychecks this month. And of those, about 33,000 employees face their first so-called "payless payday" this Friday - and 44,000 workers won't receive a check on Aug. 7.

In addition, about 1,000 employees who work for the state court system already have missed a paycheck, and stand to miss a second payment this Friday. Also, 1,000 elected judges, from magisterial judges to Supreme Court justices, would miss their first paycheck this Friday.

Once a budget is enacted, all of those employees will receive back pay.

But in the meantime, they say, they're hurting to pay bills, buy groceries and even gas up their cars to drive to work.

Rendell said yesterday that he would decide by midweek on whether to push for a stopgap budget that would permit the state to pay its employees, as well as its vendors. But Rendell did not give any detail about how large such a budget would be or how long it would last.

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The ripple effect of the Pennsylvania budget crisis is being felt as far away as Iraq. National Guard troops deployed to Iraq who work for the state failed to get their monthly stipend this month. That news comes via Twitter from Scott Detrow, a reporter with WITF in Harrisburg, embedded with Pennsylvania National Guard's 56th Stryker Brigade.

Meanwhile, there is a little movement in other areas. The Senate Labor and Industry Committee voted out a bill that would extend unemployment compensation for those who have exhausted their benefits. Federal stimulus funds would cover an additional seven weeks beyond the 72 weeks allowed and an amendment would make the benefits retroactive to July 1. A full Senate vote is expected this week. Since the bill was amended it must still go back to the House for final approval. 

And Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Commmittee, agreed to move a sales tax proposal for Philadelphia through his committee tomorrow. Mayor Nutter was in Harrisburg yesterday to rally support for the temporary tax among the Philadelphia delegation. Nutter says without it the city would have to make drastic cuts in services, including reduced trash pick up. (More from the Inquirer and Daily News) 

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He may still be on probation, but ex-state House Rep. Frank LaGrotta has decided to speak out rather bluntly about what he calls questionable activities going on under the Capitol dome - particularly around budget time.

In his new blog, LaGrotta, who pleaded guilty in 2007 to hiring two relatives for "ghost" jobs in his district office, contends that not having a budget is no sweat off a lawmaker's brow:

every day the legislature is in session, usually doing nothing, legislators and senators receive $158 a day in per diem.

And the money is TAX FREE!

That means for every 5-day week the legislature is in session, the Members who claim per diems are pocketing $790 tax free dollars.

LaGrotta, a Democrat from Lawrence County, says while the per diem is supposed to cover food and lodging, many lawmakers bunk at cheap motels (LaGrotta's favorite was a Knights Inn near the Capitol at $23 a night) and get wined and dined by lobbyists.

That first time I pushed the green button on the day I was sworn in as a “freshman,” the per diem rate was $77 per day. When I was recorded on my final Master Roll November 30, 2006 the rate had doubled to $143 a day.

There is not a Member in or near the capitol that ever misses the Magical Master Roll Call vote.

Every time I pushed that button, I remembered a former House Member, Jerry Kosinski of Philadelphia, who always sang a song when the Master Roll was taken:
(For you theater buffs, it is sung to the tune of "Maria" from West Side Story.)

“Per diem…
“I just got another per diem.
“For coming to the Floor,
“And doing nothing more,
“All day…”

What I learned soon after my first Master Roll is that there also was second verse to Jerry's song; a verse near and dear to every Member’s heart (not to mention their bank account):

 Per diem…
“My goal is to save my per diem.
“To eat and drink all day,
“While lobbyists, they pay,
“For me...”

LaGrotta writes, according to the House Chief Clerk's Office, the average Member of the Pennsylvania State House collected $17,160 in per diems in 2006. Added to the $78,000 salary and all the other “legal” perks, the job became an annual $100,000-plus cash cow. 

LaGrotta served 20 years in the state House before being ousted in 2006, as he said, as "collateral damage in the midnight pay raise debacle of 2005." He was sentenced to six months house arrest and 30 months probation for hiring no-show employees. He also was fined $10,000, had to repay $27,092 to the state and was required to do 500 hours of community service.
 

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His quotes were always funny and shockingly honest, making him a darling of the press, but Rendell spokesman Chuck Ardo now says he is done with that chapter in his life.

Ardo, whom Rendell once called his "pithy press secretary," has informed the governor's office that he will be retiring after a budget deal is struck and the now 24-day impasse is a not-so-distant memory.

Ardo, 62, said he is leaving because the "physical and emotional toll of the job has caught up with me." The state's budget crisis has only compounded matters. Ardo's blackberry rarely stops buzzing and it's not unusual for him to be fielding phone calls from reporters - or the governor - into the wee hours of the morning. 

Plus, he said, his 11-year-old grandson Dylan is coming to live with him. And anyone who knows Ardo at all can easily tell that Dylan is his number one priority and one of the biggest sources of joy in life.

Ardo, who started working for Rendell during his first gubernatorial run, doesn't know what he will do after he leaves, but said it will definitely be less "strenuous" work.

Now, there is one caveat: Ardo hasn't formally penned his letter of resignation yet. 

And there are few signs that a solution to the budget deadlock will emerge anytime soon. 

The way things are going, Ardo could find himself working well into the fall season.

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Gov. Rendell said this morning that he can envision signing a state budget that does not contain his proposal for a 16 percent increase in the personal income tax rate.

But, Rendell said, he continues to believe that a personal income tax hike is the fairest way to raise new revenue to help plug a $3.3 billion deficit that is saddling the state.

"I think the PIT (personal income tax) is much fairer," Rendell said, "but I've said I'm not wedded to the PIT at all."

Rendell's proposal to raise the income tax from 3.07 percent to 3.57 percent has been one of the major sticking points in budget negotiations this year, leading to the now 23-day-old impasse. The new fiscal year began July 1.

The governor said he is hopeful that a compromise can be struck over the weekend, and added that he anticipates high-level talks between himself and legislative leaders over the next few days.

Hanging in the balance are paychecks for tens of thousands of state employees and timely payments to state vendors.

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Irked by the 55-month sentence given last week to former Sen. Vincent J. Fumo, a Harrisburg activist has begun a campaign to collect vacuum cleaners.

Yes, some explanation is in order.

Among the myriad of corruption charges leveled at Fumo was that he had the non-profit he controlled buy him 19 Oreck vacuums.

So, in the mind of Gene Stilp, who Ralph Nader once described as the nation’s “number-one political prop artist,” it all presented the perfect opportunity for jest.

This morning, with the Capitol as a backdrop, he lined up 30-some-odd vacuums – from wet-dry vacs to canisters models – and took to the podium where a sign read:

“Judge Buckwalter: Your Fumo Verdict Sucks”

Judge Ronald L. Buckwalter gave Fumo four years and seven months in prison in a sentence many, including Stilp,founder of Taxpayers and Ratepayers United, believe is extraordinaly lenient.

Stilp is urging federal prosecutors to appeal the sentence and hopes to collect as many vacuums as he can in the next two weeks before delivering them to Buckwalter’s chambers in Philadelphia.
 

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