HARRISBURG - Gov. Rendell announced Monday that he was canceling the $30,000 contract his administration awarded to a prominent Philadelphia public relations firm, saying it was inappropriate for taxpayers to be paying for such work.

Rendell said he would ask Kevin Feeley, president of Bellevue Communications, to return $10,000 the state had paid him to date for work on the so-called legacy project.

The project, first reported in The Inquirer last week, calls for compiling personal stories from residents to illustrate how Rendell's policies and programs in his seven-plus years as governor have improved their lives. The information would then be used during budget negotiations with the leaders of the General Assembly to argue against cutting key programs.

The governor said Monday he would pay Feeley instead with money from his campaign fund - which had more than $2.3 million on hand at the end of last year, according to state records.

"I will not spend one dime of the taxpayers' money on the assemblage of things that are for legacy purposes," he told reporters at a news conference in the Capitol.

He added that the expense would be "inappropriate at any time, even if the commonwealth were running a significant surplus," but even more so when the state is facing a $1.2 billion deficit.

When asked last week if a state-funded PR campaign was under way, Rendell said no. "There is no money for a campaign," he told reporters.

The governor said Monday that he had not known at the time about the "legacy project." He said it was put together by staff members "in an overly zealous mood."

Rendell declined to name names, adding only that it was put together by people who believe in him and who were "overly enthusiastic.

"On a few matters - not on very many, but on a few matters - I have better judgment than my staff," he said.

The funding question aside, Rendell said he believed the project was not only valuable but important for the state's future.

"I believe in many ways the future of the commonwealth - and in particular the future of our young people - rests on what happens in this budget," he said.

Republicans last week had said the contract was a slap in the face at a time when Rendell was warning of possible layoffs of state workers as recession-ravaged revenues continue to trickle.

GOP leaders in the legislature argued that the administration already had people on its staff who were paid to do nothing but public relations work.

"Here he is signing a sweetheart deal to do something that he has dozens and dozens of public relations people on his payroll to do," Steve Miskin, spokesman for House Minority Leader Sam Smith (R., Jefferson), said Friday.

The governor said Monday he would be asking his departments to put together a report this fall for his successor - he is barred from seeking a third term - listing the administration's programs and highlighting some of the challenges the state faces.

This is not the first time the administration has been criticized for an outside hire. Last year, Rendell brought in a Philadelphia political strategist and media consultant, Ken Snyder, to help him with publicity. Snyder worked under a $100,000 state contract.

Feeley has a long resumé, including having served as Rendell's chief spokesman when Rendell was mayor of Philadelphia in the 1990s.

Feeley said last week that he had spoken to dozens of people during the last few months and that his report would contain stories of Pennsylvanians who had been helped by state programs.

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