HARRISBURG - Gov. Rendell insisted yesterday that he and lawmakers were "making progress" on reconciling their differences on the state budget, having agreed in recent days to tens of millions of dollars in additional cuts.
Rendell conceded, however, that those cuts would require up to 800 previously contemplated layoffs, and that the workers affected could begin receiving layoff notices even before a budget agreement is reached.
"And I regret that deeply," Rendell told reporters at a news conference yesterday, adding that he would prefer to implement rolling furloughs but cannot do so without the consent of state employee unions.
But he said the additional cuts, which will total about $200 million, are necessary if his administration is to forge a compromise with Republican lawmakers on a spending plan for fiscal 2009-10. The reductions include trimming workers from social-services programs and scaling back expansion incentives for private companies.
The budget is already a week overdue - the deadline to enact one was July 1 - and the two sides have been saying it would be weeks before a deal could be reached.
That is because the administration believes the state's budget problem, which includes a $3.3 billion deficit, cannot be solved without significantly increasing revenues. Rendell has proposed a temporary 16 percent increase in the personal income-tax rate, which he said would garner roughly $1.5 billion annually during the three years it is in place.
Republican lawmakers, including those who control the Senate, oppose the hike, which they maintain would hurt working families already struggling to cope with the recession. Instead, they are advocating steeper cuts.
"We're making progress," Rendell said yesterday. "It's not where we need to be . . . but it's a step in the right direction."
Still, with every day that passes without a resolution, there are repercussions.
Those affected by the impasse include tens of thousands of state workers, many of whom will receive their last partial paycheck July 17. After that, they would not be paid but would still be expected to show up for work. They will be reimbursed back pay once a budget agreement is struck.
And yesterday, Rendell said he intends to write to some of the state's larger vendors to ask them to be patient if the state loses its authority to pay them.
"It's my expectation that most of our vendors will hang in there with us," said Rendell.
He later pointed out - rather ominously - that the state has the right to terminate contracts with vendors without reason.
"I'm looking for loyalty," he said, "in all the right places."
Contact staff writer Angela Couloumbis at 717-787-5934 or acouloumbis@phillynews.com.
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