Budget battle in Pa. may be rerun

HARRISBURG - With lawmakers returning to work tomorrow for the final go-round in the Pennsylvania budget process, many here are wondering again whether they will spend another Fourth of July holiday in the Capitol.

Partisan squabbles have slowed budget negotiations each June since Gov. Rendell took office in 2003, sometimes leading to late-night blowups and always to a blown deadline on the 30th. This year is shaping up to be no different.

In addition to his proposed $28.3 billion budget, Rendell wants to borrow millions of dollars for energy conservation and expanded health care for the uninsured, while Republicans want tax cuts and reduced spending.

To get what he wants, Rendell has kicked into high gear his PR campaign for several big-ticket items that he believes are integral to the budget negotiations. Rendell or his surrogates have been dispatched across the state to seek public support for a $850 million energy-conservation program, a $390 million five-year plan to provide health care for tens of thousands of uninsured Pennsylvanians, and to increase education funding by $2.6 billion over six years.

"Health-care reform has enormous budgetary implications in the short and long run," said Rendell spokesman Chuck Ardo, pointing to the rising cost of health care as a principal driver of the budget increase. "It is one of the issues that has to be addressed if we are going to pass a responsible budget."

Republican leaders agree that something must be done to reduce energy costs and reform health care, but they object to tying those programs to the core budget.

Add to that tensions between Rendell and Senate Republican leaders, who last month rejected his slate of judicial nominees, and distractions plaguing the House: a scandal involving staff bonuses that has dogged Democrats, and fractures in the GOP caucus.

Then last week, Senate President Pro Tempore Joseph Scarnati (R., Jefferson) shortened the time for negotiations by scuttling his chamber's traditional post-Election Day session in November.

Because all House seats and half the Senate's are up for election in the fall, members will be out campaigning and little business is likely to be done. So cutting sessions after the election may produce a greater legislative logjam now.

"It's as bad an environment as we've seen in Rendell's five years," said G. Terry Madonna of the Center for Politics and Public Affairs at Franklin and Marshall College. "The acrimony among various groups does not bode well for a rapid, successful conclusion of the process."

The budget may be the least of the problems lawmakers and the administration face. The plan would increase overall spending by 4.2 percent with no tax increase, but with revenue shrinking and the surplus dwindling, Republicans are concerned about the state's ability to fund the core budget.

Amid a weak economy, Republicans say they would like spending reduced, and they want to deliver some kind of tax cut. Some proposals have targeted small businesses and lower-income residents, and others offer across-the-board reductions.

Rendell says he's willing to consider the Republican proposals. But he says he doesn't understand GOP objections to borrowing money for programs - such as health, energy and economic development - that would save money in the long run.

Rendell, in his February budget address, projected a surplus of more than $400 million, but the latest report puts that figure at less than $300 million. Estimates of overall tax revenue are off by $142 million.

"The most challenging change since February is the softening of revenue numbers used to calculate the budget," said Sen. Dominic Pileggi (R., Chester).

Lawmakers are mixed on the prospects of meeting the budget deadline; some say budget negotiations are ahead of schedule, and others say they are lagging because of Rendell's insistence on items unrelated to the budget.

"We're not on the home stretch. We haven't rounded the first corner," House Minority Leader Sam Smith (R., Jefferson) said. "The governor continues to throw everything into the budget mix."

House and Senate Democrats and administration officials blame Senate Republicans for dragging their feet on Rendell's health-care and energy proposals while passing bills that stand little chance of approval in the Democratic-controlled House.

"Given the work schedule of the Republican-led Senate, our hope of passing a timely budget are fleeting," Ardo said.

Pileggi disputed the contention that the Senate is doing nothing on health care or energy, pointing to legislation it passed on renewable energy and funding for medical liability insurance.

"Those bills have been sitting in the House without action," he said.

Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee, said he was optimistic that a meeting between House and Senate leaders and Rendell scheduled for tomorrow would bring progress.

"My objective is to get it done by the end of June," Evans said. "But obviously there are a lot of players out there."