State budget impasse holding up stimulus spending

Gov. Ed Rendell won't sign GOP budget

According to a new analysis of Recovery spending by the Government Accountability Office, Pennsylvania’s legal requirement that most formula funding must get a nod from the General Assembly, in the form of a budget approval, explains why the state that has exceeded requirements in transportation projects is lagging in getting dollars out to schools and law enforcement.

Of the 16 states that comprise GAO’s study sample, only Texas trails Pennsylvania in disbursements from the State Fiscal Stabilization Fund, most of which is meant to plug budget holes in education funding. The Lone Star state has yet to apply for these funds, while Pennsylvania submitted its application June 26, the same day Gov. Ed Rendell presented his budget option featuring $500 million in cuts and a 6 percent income tax hike. The state Legislature didn’t approve the plan. In the meantime, the school funding situation grew worse and negotiations between the governor and legislative leaders slashed another $72 million July 7, with nearly $14.4 million coming from education.

“Pennsylvania’s current budget debate centers on the state basic education funding level, and according to state officials, local school districts are unable to spend Recovery Act funds until they are appropriated in the Pennsylvania budget,” the GAO report states.

Ohio and Illinois reported similar budget-related issues in drawing down their education funds. Pennsylvania has available to it $1.3 billion in stabilization funds, the biggest but not the only chunk of money caught in the wait.