HARRISBURG - With hours to spare before the new fiscal year begins, the General Assembly approved a $28 billion budget, marking the first time in eight years that legislators and the governor agreed on a spending plan by the June 30 deadline.

Just before 6 p.m. Wednesday, the House, in a 117-84 vote, signed off on the budget deal brokered earlier in the week by Gov. Rendell and top legislators. The chamber did so only minutes after the measure came up for consideration - and without the customary hours of speeches or debate.

Earlier in the day, the Senate, too, took less than a half-hour to approve the deal in a 37-13 vote.

The bill now goes to Rendell's desk for his signature. The governor said in a statement that he intends to sign it; he could do so as early as Friday. But he said he would hold off until several other budget-related bills, including one for capital expenditures, are passed.

There could be one snag: a dispute between Republicans who control the Senate and Democrats who control the House over the creation of an independent budget office to issue revenue projections and spending reports. Senate Republicans are championing the idea, but House Democrats are resisting - and that could stall passage of the capital expenditure bill.

"It is a line in the sand for us," said Drew Crompton, a Senate Republican lawyer. "But I don't think it's catastrophic. I get the sense that there's interest in resolving it."

Rendell called the budget's swift passage "a reflection of what can happen when leaders from all quarters and all parties come together to make difficult and important decisions in a bipartisan and timely fashion."

The budget calls for spending about $1 billion less than Rendell had originally proposed, and would boost spending over this year less than 1 percent.

And it does not raise taxes.

But it does leave many critical questions unanswered.

The spending plan relies on hundreds of millions in federal Medicaid funds from Congress that do not appear likely to materialize.

And it calls for taxing the extraction of natural gas from the Marcellus Shale formation - but puts off until fall such critical decisions as what the tax rate will be, how much revenue is expected, and how that revenue is to be disbursed.

Senate Majority Leader Dominic Pileggi (R., Delaware) said Wednesday that the bill reflects that "we are living through a national recession."

As a result, he said, "we had to make tough but necessary decisions to produce a balanced budget."

Others weren't so sanguine.

Sen. Daylin Leach (D., Montgomery) said he believed legislators rushed to beat the budget deadline at the expense of producing a plan that would have better protected funding in areas such as mental-health services and environmental protection.

Leach also said the budget fails to address what is being forecast as a fiscal tsunami heading for Pennsylvania. Legislators are projecting a multibillion-dollar deficit next year because federal stimulus funds will dry up and public employee pension payments will come due.

"There was too much of a priority placed on getting it done before June 30," Leach said Wednesday after voting against the legislation. "I know people worked very hard during negotiations, but at the end of the day, I would have been willing to stay a little longer and fight for things that I think are important."

Leach said one pressure point is that this is an election year. In November, all 203 seats in the House and half of the 50 seats in the Senate are up for grabs.

No legislator, he said, wanted to deal with the negative publicity that ensued after last year's budget was passed a record 101 days late.

G. Terry Madonna, a widely quoted political science professor and pollster at Franklin and Marshall College, said the elections and the glowering temperament of many voters toward incumbents this year "transcended every other consideration."

"Members of the legislature," said Madonna, "did not want to remain stuck in Harrisburg in a year when voter confidence is at its lowest level in modern history."

Other political observers said many lawmakers also feared the T-word - they shuddered at the notion of having to vote on any budget proposal that included raising taxes in an election year.

That is why there was little enthusiasm for Rendell's proposed tax on cigarettes, cigars, and smokeless tobacco - and that idea died a quick death. Likewise, the governor's plan to close the so-called Delaware loophole - which allows corporations headquartered elsewhere to avoid paying certain business taxes in the state - expired for lack of support.

The budget includes a $250 million increase in basic-education funding for public schools, a signature issue for Rendell. The figure is less than the governor wanted but still stands out in a budget otherwise characterized by cuts.

To help offset the state's recession-driven $1.2 billion deficit, the budget includes steep cuts for state parks, environmental-protection programs, health-care centers, and libraries, among other items.

That, in turn, will likely translate into layoffs of about 1,000 state employees, according to administration estimates.

The situation, however, will be far worse if the federal Medicaid money is not approved by Congress.

The $28 billion spending plan relies on receiving $850 million from Washington to help balance the budget and fund federally mandated Medicaid obligations.

If all or even a portion of that money is not approved, administration officials and legislators will have to cut more programs. Rendell has predicted that 20,000 state workers, county and municipal employees, and public-school teachers could lose their jobs.

"This budget is a political shell game rather than a real solution," said Rep. Scott Perry (R., York), referring to the fact that it relies on many unknowns.

Rendell spent Wednesday in Washington lobbying federal lawmakers reach a speedy resolution and come up with the money. But this year, billion-dollar spending bills are tough territory for members of Congress facing elections of their own.

State House Speaker Keith McCall (D., Carbon) said the state has enough money right now to meet its Medicaid obligations until January. He said he and others will continue to lobby lawmakers in Washington to pass a bill by the congressional deadline of Oct. 1.

This is only the second time in Rendell's tenure that legislators have passed a budget on time. They did so in 2003 - but Rendell vetoed a large chunk of that budget, forcing a months-long stalemate over education funding and tax increases.

Governors Plead Case in D.C.

Gov. Rendell and colleagues from several other cash-strapped states went to Washington to warn that unless Congress gave them more money to help pay for health care for the poor, their states could face layoffs and cuts in services.

The governors, including New York's David Paterson and Michigan's Jennifer Granholm, said Wednesday that their states needed the money to avoid cutbacks that could hurt some of their most vulnerable citizens.

A deficit-weary Congress recently rejected billions of dollars in additional aid to states. The federal stimulus program enacted last year expires in December. Congress was poised to extend some funding to states, including $16 billion for Medicaid, the public health-care program for the poor. But the measure died in the Senate.

- Associated PressEndText

For Pennsylvania House roll-call votes, go to http://go.philly.com/pahousevote

For Pennsylvania Senate roll-call votes, go to http://go.philly.com/pasenatevote


Contact staff writer Angela Couloumbis at 717-787-5934 or acouloumbis@phillynews.com.