GOP may blockade city budget in state Senate

Gov. Rendell holds up the bill he signed yesterday to extend unemployment benefits to thousands of workers statewide. The bill will extend compensation by seven weeks.

Call it one little step forward for Philadelphia's budget in Harrisburg and one big leap back.

The state House yesterday gave initial approval to legislation allowing the city to increase its sales tax by 1 cent on the dollar for five years and to change the way it replenishes its pension fund.

The House, controlled by Democrats, also voted 195-3 to give final approval for a state budget proposed and approved in May by the Republicans who control the state Senate.

Gov. Rendell, locked in a budget stalemate with Senate Majority Leader Dominic Pileggi, of Delaware County, asked for yesterday's House vote. He plans to use his line-item-veto power this morning to slash more than half of the new budget, leaving only money to keep state offices open and to resume paychecks for state employees.

Rendell called it a "bridge budget" and said it would keep a minimum of government running while he haggles with the General Assembly on whether to cut more spending or raise taxes.

A complete state budget is five weeks overdue.

The House could hold a final vote for Philadelphia's budget issues as early as today.

Mayor Nutter yesterday called the House vote "very important" and said he hopes the Senate will take quick action if the House approves the legislation today.

But that looks unlikely because Pileggi said the city's budget issues won't pass the Senate until the larger state budget dispute is settled. That would mean weeks of waiting.

"The two should have no relation," Rendell spokesman Ken Snyder said of Pileggi's connecting the city's budget issues to the overall state budget. "He has linked them artificially."

The clock is ticking for Philadelphia. In 10 days, the city must start taking steps if it is to present a balanced budget to the Pennsylvania Intergovernmental Cooperation Authority by Aug. 30. That fallback budget would not include the sales tax or pension changes, valued at $700 million over five years.

To make up the difference, it would cut 3,000 city jobs, including those of hundreds of cops and firefighters, close all library branches, shut down all recreation and park programs, and reduce trash pickup to every other week.

Nutter, who has been in Harrisburg since Monday to lobby for the city's budget needs, has been stepping up a public campaign about what he calls "dire consequences" for the city.

"No one knows when the state budget will be completed," Nutter said. "We are running out of time because we are running out of money. We desperately need action, first in the House, then in the Senate because of the financial circumstances."

Some members of the city's delegation to the General Assembly introduced last-minute amendments Monday to the legislation for the city's budget. They were withdrawn yesterday, including state Rep. Brendan Boyle's proposal to exempt items that cost more than $1,000 from the increased sales tax. Boyle didn't respond yesterday to requests for comment about his amendment.