Pa. budget awaits votes on two bills

HARRISBURG - Gov. Rendell says he will sign the $28 billion budget that just passed the Pennsylvania legislature, but only if lawmakers also approve a pair of related bills he says are necessary to support the state's spending.

Those bills have been held up for more than a day by a dispute between Republicans, who control the state Senate, and Democrats, who rule the House.

Rendell said Thursday that if those differences persisted and legislators took no action on the bills in the next 10 days, he would be required under the state constitution to veto the hard-fought budget.

"We hope it gets resolved because it could delay everything," Rendell said at a news conference in the Capitol. If the dispute is settled, he said, he will sign the budget on Tuesday after the July Fourth weekend.

The dispute in the legislature centers on whether to establish an Independent Financial Office to act as the General Assembly's outside check on the governor's revenue projections and spending reports.

Senate Republicans, who have championed creation of such an office, say it was part of the overall budget agreement between both parties this year, and want to include it in the package of budget-related bills that still needs legislative approval.

House Democrats, led by Rep. Dwight Evans of Philadelphia, counter that there was never such an agreement. "They are violating the deal we came up with," said Evans, who chairs the House Appropriations Committee. He said he would be happy to discuss the issue in the future but does not believe it should be a part of the budget discussion.

"This is ridiculous," said Evans. "We passed a budget and these guys want to create their own bureaucracy."

Senate Republicans counter that Democrats are simply trying to protect their turf - and view the establishment of an independent budget office as a threat to the powers of the governor's office and legislative appropriations committees.

"There is concern and anxiety any time there is a change," said Senate Majority Leader Dominic Pileggi (R., Delaware). "But that should not stand in the way."

One thing all agree on is that the last-minute dispute has the potential to delay the state budget. Until Thursday, the headlines were largely about how, for the first time in eight years, the legislature and governor had agreed on a budget before the July 1 start of the new fiscal year.

Rendell on Thursday urged legislative leaders to work it out, but did not take sides on the issue.

"There is a friend of mine who has a great saying, 'I don't have a nickel in that dime,' " said Rendell. "We don't have a nickel in that dime."

The $28 billion budget calls for spending about $1 billion less than Rendell originally proposed, and would boost spending over this year less than 1 percent. It also increases funding for basic education in public schools by $250 million, down from the $355 million Rendell had proposed.

And it does not raise taxes.

But it does not come without caveats - or pain.

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

It also 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.

And 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, libraries, and other items.

Rendell on Thursday said the budget contained painful cuts to deal with the repercussions of revenues ravaged by the recession.

"I've spent most of my adult life trying to make things better for people and I can't say, except for a few areas, that this budget does that," Rendell said. "So it's very painful for me . . . but you've got to deal with the realities that are there."