Rendell might back stopgap budget

With the prospect of a timely budget passage dwindling, Gov. Rendell said yesterday that he would consider endorsing a rare stopgap budget to keep government operating beyond the fiscal-year deadline in 12 days.

Rendell said at a Capitol news conference that the main intent of such a partial budget would be to pay salaries beyond July 17, when the government loses its authority to issue its first paychecks in the new fiscal year.

Senate Republican leaders, who have flatly rejected a personal income-tax hike and other revenue-generating proposals Rendell says are needed to balance the budget, said they were open to the idea.

Sen. Dominic Pileggi (R., Delaware) said in an interview yesterday that he would be "willing to have a conversation" with the governor about a stopgap budget.

The advantage is it would allow the government to continue providing necessary services, he said. "The disadvantage is that it would only postpone the day of reckoning."

Without any action, beginning with their July 17 payday state employees would not be compensated for any hours worked after midnight June 30. Rendell has said that if that happens, workers would receive retroactive pay within four weeks after a budget is passed.

No budget has been passed on time since Rendell took office in 2003, but he and the legislature have usually reached agreements before furloughs or closures were necessary.

In 2003, Rendell signed a full budget sent to him by the legislature, but only after removing the education section because he did not agree with the Republican funding levels. As a result, the complete 2003-04 budget was not finalized until December 2003.

In 2007, Rendell ordered some state government services shut and placed a third of the state workforce on unpaid furlough that lasted one day after negotiations failed to break a budget stalemate

A stopgap budget would be a first in 32 years, according to legislative leaders. When asked, Rendell said he did not know the mechanics for enacting such a budget but would "take his lead from lawmakers who had done that before."

His budget proposal, despite hundreds of millions in cuts, would maintain roughly the same bottom-line level of spending as the one he offered in February. And that is unacceptable to Senate Republicans.

"I don't know how we can ever get to an agreement" with a budget that doesn't rein in spending, Pileggi said.

A spokeswoman for Rep. Dwight Evans (D. Phila.), the House Appropriations chairman, said even a stopgap budget would have to be negotiated.

"We'd prefer to sit down and negotiate the 2009-2010 budget" in its entirety, said Evans' press secretary, Johnna Pro.

Rendell on Tuesday added a new twist to budget talks, proposing a temporary 16 percent increase in the state personal-income tax, lifting the rate from 3.07 percent to 3.57 percent for three years. Rendell said it would raise $1.5 billion needed to balance the budget in the face of a $3.2 billion deficit.

Rendell on Wednesday ordered his cabinet members to cut $500 million from their agencies' budgets, with most of the reductions coming from the Departments of Education, Public Welfare, and Community and Economic Development. Rendell expects to release details of the final cuts on Monday.