Pa. lawmakers offer framework to end budget impasse

HARRISBURG - Legislative leaders this morning announced what they are calling a "framework" for a fiscal spending plan that would end Pennsylvania's 10-week-long budget standoff.

The $27.9-billion package reduces overall spending from last year's levels and would cover existing deficits through higher taxes on cigarettes - 25 cents more per pack - and increases to levies paid by some businesses.

Broadbased taxes such as income and sales taxes would not go up under the plan.

But the plan, among other things, would tap dry the state's Rainy Day savings account and relies on tens of million in new revenue from the authorization of table games at state slots parlors and leasing fees on natural gas drillers.

"It is a budget that balances the wants and the needs of the commonwealth and the taxpayers and the constituents," Senate President Pro Tempore Joe Scarnati (R., Jefferson) said at a joint morning Capitol news conference. "Certainly there will be criticism of the budget, but it is time to have a state budget."

House Speaker Keith McCall (D., Carbon), called the deal "far from perfect" but still a compromise that represented "a coming together to end the pain for the people of this commonwealth."

In Pittsburgh this afternoon, Gov. Rendell told reporters that he would "absolutely" veto such a spending plan. "This budget is not balanced for this year, and it's a billion dollars short for next year," Rendell said, according to the Pittsburgh Tribune-Review.

"If they override it, they override it," Rendell said of the legislature. "They pay the price next year when there's a billion (dollar) deficit."

The administration has said any new budget must meet the governor's oft-repeated conditions - that any budget must not cut into his increased funding levels for education and health care and has to contain new revenue sources sufficient to make the spending sustainable in the future.

At the news conference, legislative leaders said they were hopeful that Rendell would sign off on the deal because it provides $300 million in new education funding and $1.2 billion in recurring revenue.

"As far as we are concerned, we have met his parameters," said McCall.

The legislative leaders also announced that a joint conference committee likely would pass the package on Monday and the full House and Senate could adopt it later in the week.

Pennsylvania is the only remaining state without a complete operating budget in place for the current fiscal year.

The two legislative branches - the House controlled by Democrats, the Senate by Republicans - until now appeared hopelessly deadlocked over one main point: How to fill a billion-dollar plus deficit.

Democrats, including Rendell, have insisted that there is no more room for further spending cuts without eating into core government services. Republicans, meanwhile, were adamant in their opposition against imposing any new taxes on the public during a recession.

"This represents a fair middle ground," said Senate Majority Leader Dominic Pileggi (R., Delaware.)

Rendell in early August signed a temporary stopgap budget that provided $11 billion in spending that has allowed the state to pay its employees and to fund some department spending.

But as the impasse dragged on, social service agencies that relied on state funding, including day care centers, have increasingly been forced to trim services and lay off workers.