Rendell announces ‘tight’ state budget

HARRISBURG - Gov. Rendell unveiled his $28.3 billion 2008-09 state budget proposal before a joint session of the legislature today, calling it a "tight" document but one intended to continue Pennsylvania's economic growth even as the nation appears headed toward a recession.

Invoking President Franklin D. Roosevelt and his New Deal that lifted the nation from the Great Depression, Rendell urged swift passage of his fiscal blueprint.

"While our fate is not nearly as bad today, the trends do look awfully bleak," Rendell said in his hour-long budget speech today.

The cornerstone of the governor's spending plans is a call to issue within eight weeks rebates of up to $400 to low-income Pennsylvanians. Those rebates, he said, would be used by 475,000 families to meet monthly bills, keeping them from growing deeper in debt while also stimulating the economy.

"The families we're targeting have limited resources, and they are more likely to spend these funds in the consumer sectors of the economy," he said. "When they do, that spending will help stimulate our economy, and that helps us all."

Rendell's stimulus plan seeks to create jobs by directing $270 million to replace and repair the state's crumbling bridges, airports and dams.

"By acting now, we can stimulate Pennsylvania's economy, protect our citizens from the impact of a national downturn, and continue to make the Commonweath more competitive in the battle for jobs and opportunity," he said.

In comparison to other states, Pennsylvania is much better off financially, Rendell said.

He said at least 24 states are facing glaring budget deficits totaling $34 billion, including New Jersey with its $3.5 billion deficit. Pennsylvania, Rendell projects, will have a year-end surplus of more than $400 million.

"We are not nearly confronted with the overwhelming budgetary problems that challenge many other states," Rendell said.

But, he added, "ours is a boat that can still be swamped by the shifting tides of the national economy."

At $28.3 billion, the proposed spending plan for the fiscal year that begins July 1 is an increase of $1.1 billion, or 4.2 percent over current levels.

It calls for no broadbased tax increases.

Overall, education spending would receive among the largest increase. For example, Rendell has called for basic education funding to the state's 501 public school districts to rise by $291 million, or 5.9 percent.

The governor also is proposing a new program to spend $100 million over three years on flood control projects, money that would come in part on a surcharge on property insurance premiums. Also new is a plan to spend $20 million, double the current levels, to increase the number of local police officers, half of which would be earmarked for Philadelphia to hire 100 officers.

Although there were fresh ideas unveiled today, much of Rendell's spending plan is built on unfulfilled requests in prior budgets.

He again is pushing for:

- $500 million in seed capital known as the Jonas Salk Fund to support the state's health science research centers.

- $850 million for "energy independence" efforts that include the production and use of alternative fuels in the state.

- Passage of his proposed "Prescription for Pennsylvania," which would among other things provide affordable basic health insurance for small business and uninsured adults.

To help fund that program, Rendell is again urging lawmakers for a 10-cent-a-pack increase on cigarettes and to extend that tax to smokeless tobacco.

Rendell's presentation of his fiscal blueprint touches off weeks of appropriation committee hearings in the House and Senate during which legislators will dissect his ideas and offer ones of their own.

Yesterday, the governor predicted smooth sailing through the legislature and that he expected the budget could be passed early this year, perhaps by April.

That appears to be wishful thinking for Rendell who has yet to have any of his five prior state budgets passed on time.

Already, Republicans who control the state Senate and are narrowly in the minority in the House have questioned details of the governor's stimulus package.