Rendell, legislators say 'progress' on budget deal

Budget talks took a positive turn today with Gov. Rendell and legislative leaders saying they are making progress on a deal a week ahead of the June 30 deadline.

The gap between what Senate Republicans say they are willing to spend in the 2010-2011 budget year and what Rendell and House Democrats can accept is narrowing amid cordial negotiations.

"I'm optimistic," said Rendell this afternoon after leaving hour-long meeting with House and Senate leaders in the Capitol. " We are working on trying to figure out the amount we can spend to benefit the people of Pennsylvania while recognizing our obligation in tough economic times to keeping the spending down."

Rendell's nearly $29 billion initial budget proposal announced in February has been whittled down to about $28 billion with an additional $300 million in basic education funding, while Senate Republicans have maintained they do not want to spend more than $27.5 billion.

"We continue to look for a [spending] number that we can sustain and a number we can agree to," said Senate President Pro Tempore Joe Scarnati (R., Jefferson).

Rendell said he will review on Thursday a list of cuts presented to him by Senate Republicans and "see what I can live with." Rendell says he wants to preserve additional school funding as well as as funding in the Department of Community and Economic Development that helps create jobs.

Although House Minority leader Sam Smith (R., Jefferson) cautioned that there are still "revenue issues to be resolved," Scarnati gave reporters 80-20 odds there would be a budget on time for the first time since Rendell took office in 2003.

Also still unresolved is the anticipated $850 million in federal Medicaid that is part of a bill stalled in Congress. Rendell has said he will have to lay off thousands of state workers is that money does not materialize by July 1.

Legislative leaders say budget talks will resume again tonight.

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