The great budget divide largely ideological

When Republicans secured Senate passage of their bare-bones Pennsylvania budget this month, they hailed it as "prudent" and "fiscally responsible," while Democratic lawmakers lined up to oppose its across-the-board spending cuts, calling it "out of touch" and "mean."

Not since Gov. Rendell took office in 2003 has a state budget proposal exposed this starkly the deepening ideological divide between legislative Republicans and Rendell and his Democratic supporters in the General Assembly.

The state's growing $3 billion budget gap, along with the impact of the recession and partisan division over the federal economic stimulus program, has brought to the fore philosophical differences that were not as pronounced in healthier times.

"Republicans have always claimed there's too much spending," said G. Terry Madonna of Franklin and Marshall College. "This year there's a sharper ideological edge to their comments driven by the national mood."

At the heart of the debate are conflicting views about how the state should respond to the struggling economy.

Senate Republicans say their $27.3 billion budget proposal controls spending and would prevent future tax hikes. Democrats, who support Rendell's $29 billion budget, argue that continued expenditures would help pull the state out of the slump and ensure that a growing number of people who need services would get them.

At a news conference, Rendell said that by slicing $1.3 billion from the total for last year's budget, he tried to make "responsible cuts" while continuing to extend help to "people who are in trouble."

In addition to using roughly $2.4 billion in stimulus funding to help balance his proposed budget, Rendell offered a menu of limited tax increases, including a 10-cents-a-pack increase on cigarettes, and new taxes on smokeless tobacco and natural-gas extraction.

The Republicans rejected any tax increases or withdrawals from the state's Rainy Day Fund and instead made deeper budgetwide cuts.

In the eyes of Rendell and the Democrats, some of the steepest Republican reductions targeted education, which they said would put pressure on school districts to raise taxes. Democrats also said proposed cuts in health-care funding could jeopardize stimulus money, job training, Head Start, libraries, and child care.

"It's extremely mean. It goes beyond common sense," said Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee.

Children's and health-care advocates assailed the GOP budget, saying it would shred the social safety net and ignored economic realities of the tens of thousands who have lost their jobs across the state.

"Kids and families are betrayed," said Shelly Yanoff, executive director of Public Citizens for Children and Youth. "I thought there was no longer a question that government would make sure kids are healthy and that the state would fulfill its obligation to education funding."

Sen. Jake Corman (R., Centre), chairman of the Senate Appropriations Committee, called Rendell's budget unrealistic and based on growth rates for 2010 and 2011 that are double some estimates.

In crafting the budget, Corman said, he tried to maintain a basic level in funding for those in need but spared no groups.

"We reduced [budget] lines for business, and [legislative and executive] discretionary spending was zeroed out," he said. "No one was targeted."

Business leaders said that under the GOP budget, businesses would have fewer sweeteners such as grants, loans, and tax credits. They added that any new taxes would force the business community into a downward spiral.

"Programs that help business will take a hit," said Gene Barr, vice president for government and public affairs for the Pennsylvania Chamber of Business and Industry. "There is pain for everybody."

Senate Majority Leader Dominic Pileggi (R., Delaware) said the GOP plan was based on a simple premise: The state has $27.3 billion in state revenue, and budget analysts had to find a way to keep appropriations below that limit.

He defended the Republicans' decision to increase some Medicaid funding as an effort to "preserve the necessary safety net in health care."

So what is the prospect of the Senate Republicans and governor's reaching a budget deal by the June 30 deadline?

Rendell, saying he is willing to make more cuts, implored Senate Republican leaders to put aside philosophical differences to reach a compromise.

In an interview Thursday, Corman indicated Republicans were willing to talk, saying he was not "married" to the $27.3 billion budget but also was not willing to leave the next governor with a large budget hole should the economy not turn around and stimulus funding run out.

"Everyone who took budget reductions understands that reductions have consequences, but so do tax increases," Corman said. "We showed what a no-tax budget looks like, good, bad, or indifferent."