Rendell considers stopgap budget during impasse

HARRISBURG - Acknowledging little progress in state budget talks almost four weeks into the new fiscal year, Gov. Rendell yesterday said he was considering an interim measure so that tens of thousands of state employees can receive paychecks.

The governor said 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 yesterday would not give any detail about how large such a budget would be or how long it would last.

The governor did concede there was little hope for a swift end to the impasse after weekend negotiations with Republicans who control the Senate. He was openly critical of the GOP senators yesterday, accusing them of "living in a fantasy land" and saying that they were refusing to give an inch on any of their positions.

"They have to absolutely have a reality check," Rendell said during a news conference in the Capitol. "There's pain here. There's pain for everybody. And they've got to start absorbing some of it. They've got to do things that they don't like. I've done things that I don't like."

Senate Majority Leader Dominic Pileggi countered that his caucus had been willing to discuss ways to settle the differences. But he added that if Rendell's version of "negotiating" meant that Republicans must support the administration's call for a 16 percent increase in the state's personal income tax, "then I disagree with him - as does most of Pennsylvania."

On that front, Pileggi said, there is no room to barter. He said the governor is advocating a budget with "massive" spending that can only be financed by "a massive tax increase."

"And that is not something we're going to support," Pileggi reiterated yesterday.

Pileggi's caucus has pushed for a $27.1 billion spending plan that would make steep cuts - the administration has called some of them unacceptable - but would not raise any taxes. The GOP spending plan also calls for one-time revenue injections, including taking money from the state's Rainy Day fund and dipping into the surplus from a fund that provides state-subsidized malpractice insurance.

Pileggi said yesterday that he would consider a stopgap measure, which would need legislative approval, but added that it would likely only delay the inevitable task of trying to work out a compromise.

The battle has been dragging on for months, and has led the state to miss its July 1 deadline to enact a budget for the new fiscal year. The latest effort to solve the impasse will apparently be a joint conference committee of top lawmakers expected to start negotiating this week.

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 as well as some of its 5,000 registered vendors.

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.

In the interim, the U.S. Department of Labor is investigating more than 1,500 complaints by state workers that they are being asked to work without compensation.

The Rendell administration has insisted that a Commonwealth Court decision effectively prohibits the state from paying its employees in the absence of a budget.

The state employee unions have appealed that decision, and the state Supreme Court has scheduled a hearing on the issue in September.

Asked yesterday why he had not signed a stopgap budget in the last four weeks, Rendell said he had hoped that a resolution to the budget deadlock would have been found by now.