More bad budget news emanating from Harrisburg:

In a rare public briefing on the state of the fiscal 2008-2009 budget, Gov. Rendell today announced that he expects a $1.6 billion budget shortfall.

In order to close the gap, Rendell already announced roughly $500 million in cuts and other cost-cutting measures, including a hiring freeze and a wage freeze for the state's roughly 14,000 non-union employees.

But here's what else he's announced this morning that he will do to whittle down the shortfall:

-Tap half -- or $375 million -- of the state's $750 million Rainy Day fund.

-Use $174 million in revenue coming from companies bidding for the right to drill on public land.

-And bank on $450 million from a bailout package for the states expected from Congress early next year. Rendell pointed out that Congress came through with much-needed funds in 2003, when many states were facing shortfalls - and added that President-elect Barack Obama has vowed similar funds will be forthcoming to states (many of which are staring at alarming, multi-million dollar shortfalls -- when he takes office in January.

The good news (yes, there is some good news): Rendell said he does not anticipate any increase in taxes. And he doesn't expect any layoffs of state employees.

At least, not for this fiscal year's budget.

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