Budget deal ends Pa. shutdown

Rendell and legislators agree on a plan that holds the line on taxes but increases costs.

Gov. Rendell laughs during his news conference with legislative leaders to announce the budget agreement. "This is an agreement where all sides can say they have achieved some of their goals," he said late last night.

HARRISBURG - State government is back in business.

Gov. Rendell and top lawmakers late last night announced an end to their budget standoff that forced the furloughs of about 24,000 public employees and the partial shutdown of state government.

Flanked by about two dozen Democrats from the House and Senate, Rendell described the spending package as "a good budget for all."

"This is an agreement where all sides can say they have achieved some of their goals," the governor said at a news conference shortly after 11 p.m. "There has to be some give and take, and there has to be some victories and some goals not achieved."

Under the deal, all of the state employees whom the administration classified as "non-critical" will return to work today, and Rendell indicated that they would likely be paid for their one-day furlough.

"If there is a way they can be made whole, they will be made whole," Rendell said.

Nine days past the June 30 deadline for a new budget, Rendell and legislators agreed on the framework of a $27.3 billion spending plan that holds the line on taxes but increases costs over the previous year by more than 4 percent.

Senate and House GOP leaders said they were pleased that the deal maintains their core principle of keeping the rate of spending down.

"We're on our way. The people of Pennsylvania won with this budget. There are no new taxes and spending limits," said Rep. Mario Civera (R., Delaware), the ranking Republican on the House Appropriations Committee.

Sen. Gib Armstrong (R., Lancaster), chairman of the Senate Appropriations Committee, added: "Republicans stood fast. We achieved something that in February I didn't think was possible."

Although the budget is not officially in place, Rendell said he was satisfied that enough progress was made to call off the furloughs and reopen government. Lawmakers could send the fiscal blueprint to Rendell by the end of the week.

House and Senate leaders also reached an accord on another Rendell priority - a transportation plan that over the next decade would provide $900 million annually in new funding for highways and mass-transit agencies through bonds and tolls on Interstate 80.

Rendell called it a "historic transportation agreement" that devotes more money than ever before for road and bridge projects and for struggling mass-transit agencies, including SEPTA, that are facing fare hikes and service cuts.

Under the deal, funding will be set aside for the expansion of the Convention Center and a new arena for the Pittsburgh Penguins.

The two sides, however, could not come to terms on the more controversial aspects of Rendell's energy-independence strategy. But in a compromise, legislators have agreed to hold a special session in the fall to deal with Rendell's proposals, which include the expansion of alternative energy use.

"This is a commonsense document that genuinely improves our commonwealth," said House Majority Leader Bill DeWeese (D., Greene).

Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee, called the deal a product of "a long fight."

"But I'm satisfied that the Democrats achieved what we set out to achieve," he added.

Rendell also secured agreements on several of his health-care initiatives: allowing nurse practitioners and other professionals to perform more medical procedures, and new policies to reduce hospital-acquired infections. However, two other health-related goals remain unfinished.

There remains disagreement in the House and Senate over the governor's push for a statewide smoking ban and his $500 million biosciences research fund. Rendell said the Senate had agreed to vote on the so-called Jonas Salk Legacy Fund in the fall.

Throughout the day, Rendell came under intense pressure even from members of his own party to resolve the stalemate.

"Today, 24,000 workers were furloughed and will not be paid, but every person collecting a welfare check will be paid. That's more than a shame. It's a disgrace," said State Sen. Lisa Boscola (D., Northampton), who described the impasse as a tug-of-war over political leverage. "We should be the ones, along with the governor, to lose our jobs."

The budget impasse centered on differences between Rendell and Republicans, mainly those who control the state Senate. GOP members pushed for a budget that increases spending below the rate of inflation, while Rendell called for a pricier plan.

The governor has also insisted that the legislature pass several of his initiatives - from the statewide smoking ban to increased highway and mass-transit funding, and an energy-independence strategy with surcharges on electric bills - before he will sign any budget.

The surcharge proposal ran into the stiffest opposition from Republicans, who saw it as a new tax.

For much of yesterday, it appeared there was little progress being made. In fact, the rift between Republicans and the administration appeared to widen at points.

State Sen. Mike Waugh ripped Rendell as a bully.

"This is not a budget impasse," said Waugh (R., York). "This is just a bully's tap dance, and the dance is being done on the backs of 25,000 unfortunate state employees."

Over the last several days, the administration has added initiatives to the mix in what GOP lawmakers have labeled "issue creep."

State Rep. John M. Perzel (R., Phila.), the former House speaker, said one item caught some negotiators off guard.

Administration officials have told legislators that the governor wanted to add a tax credit for film companies that produce movies in the state. Though the idea has been around for some time, it had not become part of the high-level talks until the last few days, Perzel said.

"Now we are holding up people's paychecks based on Hollywood," Perzel said. "I guess Tom Cruise and Barbra Streisand are important to the people of Pennsylvania."

Yesterday, House leaders abruptly pulled the plug on a session but instructed the representatives that they might be needed to vote with as little as six hours' warning.

House Minority Leader Sam Smith (R., Jefferson) accused Speaker Dennis O'Brien (R., Phila.) and the Democratic majority in the House of ending the session because they feared Republicans had the needed votes to pass a temporary spending plan. Such a stopgap measure would call back the furloughed workers and end the government shutdown.

Some, however called for cooler heads.

"Let's put down the swords, put down the sabres and get to the business at hand," said Sen. Vincent Hughes (D., Phila.).


Contact staff writer Mario F. Cattabiani at 717-787-5990 or mcattabiani@phillynews.com.

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