No break in Pennsylvania budget standoff

In the face of majority opposition in the General Assembly, Gov. Rendell yesterday reiterated his vow to veto a legislative budget plan, while Senate Republican leaders maintained they would have the votes in the legislature to override it.

Rendell, speaking at a news conference, said the proposed $27.9 billion budget violated his principles of fiscal responsibility and preservation of education funding.

"The revenue estimates are wildly optimistic and, in some cases, made out of whole cloth," said Rendell. He also said the proposal's use of federal stimulus funds for education subsidies would "create a huge gap when economic stimulus goes away" in two years.

A bipartisan legislative conference committee had been scheduled to vote on the plan yesterday morning, but the meeting was postponed late in the day by the panel's chairman, Rep. Dwight Evans (D., Phila.), who said more details of the budget proposal needed to be worked out.

"While an agreement framework is in place, there still is much work to do to finalize the components and language of the agreement," Evans said.

Senate Republican leaders said they were confident the plan would succeed in both chambers and denied speculation that the meeting's postponement was evidence the coalition formed to end the 76-day budget impasse was crumbling.

"I have every reason to believe that House Democratic leadership will be able to win the support of their caucus, and I expect at the end of the day a substantial number in the Republican caucus will support the conference committee report," said Senate Majority Leader Dominic Pileggi (R., Delaware).

But Steve Miskin, a spokesman for the minority House Republicans - who oppose the plan - said yesterday that caucus members were nearly unanimous in their opposition to the spending level and the higher taxes proposed in the so-called three-caucus plan.

Brett Marcy, a spokesman for House Majority Leader Todd Eachus (D., Luzerne), would not comment on whether the caucus would support a veto override, saying only, "We have not abandoned hope that we can meet our objectives and produce a budget that has the support of the governor."

On Friday, House Democrats and Senate Republicans joined with Senate Democrats in proposing the budget, which would impose some limited tax increases - such as an additional 25 cents a pack on cigarettes - and authorize table games at slots casinos to raise money to help plug a deficit of more than $1 billion.

Rendell immediately rejected the budget for not meeting his education-spending requirements.

He said while he would "grudgingly" accept using economic-stimulus funds to support education spending, the cuts were too deep in prekindergarten and accountability block grants, programs he links to improving test scores.

He also said the proposal relied on what he called unrealistic revenue projections.

Rendell said that the plan's revenue projections - including money from leasing more state land for natural-gas drilling and instituting a tax amnesty - fell far short of his and others' estimates, and that it would lead to a $1 billion deficit in the next fiscal year, starting in July 2010. He also said it would force more government layoffs, in addition to the 500 already implemented this summer.

Rendell called "ludicrous" the $100 million first-year estimate attributed to increased limits on small games of chance and a tax on the games. He said that with only 1,200 clubs offering small games of chance, he believed the maximum that could be generated was $4 million.

Pileggi said he stood by the plan's projections as "conservative and well-supported."

Rendell criticized the liberal use of a number one-time revenue sources, such as draining the state's $750 million Rainy Day Fund, that would not be available in future years.