Rendell announces budget trims

HARRISBURG - In the face of declining revenue and the prospect of tougher times ahead, Gov. Rendell said yesterday he would slice $311 million from the state budget while preserving vital services.

Rendell said state agency secretaries found ways to cut deeper than his proposed $200 million rollback of the $28.3 billion budget without harming essential services such as health care, education or state police.

"The revenue situation may get worse before it gets better," Rendell said in a statement. "We will continue to monitor these volatile economic conditions in order to maintain the commonwealth's balanced budget."

Agencies had been directed to trim their spending by 4.25 percent, but some departments, such as state and community and economic development, shed 5.65 percent.

The largest reductions were in agencies that get the most funding: $72 million from the Public Welfare Department, $78 million in education spending (less than 1 percent of the budgeted amount), and $27 million from corrections.

The administration also plans to cut $35 million from the community and economic development department.

Rendell said the state could save $39 million more this year if the General Assembly and other independent state entities agreed to roll back their budgets by 4.25 percent.

House Appropriations Chairman Dwight Evans (D., Phila.) said that his staff was looking at cuts in Democratic caucus funding and that the level of reductions Rendell proposed sounded reasonable.

"We will participate. I just can't say to you what the numbers are," Evans said. "In these times, we all need to make reductions."

The total legislative budget for Democratic and Republican caucuses in the House and Senate is roughly $330 million.

House and Senate Republican leaders said they thought Rendell was moving in the right direction but needed to trim deeper in the executive branch.

"With a $1.5 to $2 billion shortfall predicted by experts on both sides of the aisle, this is not enough to close that gap," said Senate Majority Leader Dominic Pileggi (R., Delaware). "We need to see a more aggressive reduction of expenditures."

Pileggi and Steve Miskin, spokesman for House Minority Leader Sam Smith (R., Jefferson), said the Republican caucuses had been cutting back spending over the last several years.

Gary Tuma, spokesman for State Sen. Vincent J. Fumo (D., Phila.) said Fumo believed that Rendell's cuts, in addition to the $750 million Rainy Day Fund, put the state in a good position to balance the 2008-09 budget.

But he said Fumo, the former ranking Democrat on the Senate Appropriations Committee, cautioned that if the economy doesn't rebound, the state could face a multibillion-dollar deficit and higher taxes in the 2009-10 budget year.

As part of his administration's belt-tightening measures, Rendell has imposed a general hiring freeze, banned out-of-state travel for state employees, and put a hold on new-vehicle purchases for the state fleet.