From Rendell to Corbett, the state of the state

HARRISBURG - Gov. Rendell has presented his successor with the equivalent of a state government playbook, including details on the workings of dozens of state agencies and even a lengthy cautionary note on the fiscal crisis ahead.

In thousands of pages meant to smooth the transition for Republican Gov.-elect Tom Corbett, who takes office next month, Rendell administration officials prepared extensive files on 25 state agencies under the control of the chief executive.

The documents paint a bleak financial picture for 2011, citing the hundreds of millions lost in federal funding because of the end of stimulus spending, which delivered $12.6 billion into the Pennsylvania economy over the past two years.

The reports also outline agency accomplishments over Rendell's eight years in office, provide information on pending litigation and even list phone numbers for the heads of hundreds of boards that advise agencies from the Department of Agriculture to PennDot.

"What the next administration does with that data is up to them, of course, but Governor Rendell wanted to make sure that information about the full extent of state government operations is available to the incoming governor," said Rendell spokesman Gary Tuma.

The positive assessment by the departing Democratic governor was bound to clash with the incoming Republican administration.

Corbett spokesman Kevin Harley called the reports "a good starting point," if overly inflated in some areas.

"Certainly, Gov-elect Corbett is appreciative of the effort that went into those reports he has reviewed most of them himself," said Harley. "Some agencies perhaps painted a rosier picture [of their accomplishments] than what we're finding."

Harley declined to be specific about which agencies he was referring to.

Corbett, who is to be sworn in on Jan. 18, faces a deficit expected to top $4 billion next year and has vowed to not raise any taxes. Instead, he has pledged to find other ways to raise revenue, including privatizing the state liquor stores and cutting what he called "waste and abuse" in government spending.

The Rendell documents present the case for the sweeping cost reductions made since he took office in 2003 and the efforts to rein in wasteful spending and fraud. They also warn that any additional cuts will have consequences.

According to the document prepared by the budget secretary, the 2011-12 budget will need hundreds of millions in additional state general fund dollars to meet increased needs in human services, skyrocketing pension obligations and rising prison population.

Corbett, who delivers his first budget address in March, has taken aim at the Department of Public Welfare, which draws $8 billion in state funds - the largest cost driver in the general fund after education.

But the documents make the case that budget increases are largely out of the state's hands because federal mandates drive Medicaid hikes and requirements to provide state funding matches will mean the loss of federal dollars if funding is cut.

The Department of Education report calls the loss of stimulus funds through the American Recovery and Reinvestment Act, as the stimulus program is known, "the ARRA funding cliff."

In the current fiscal year, $650 million of the state's $5.8 billion basic education subsidy is funded by State Fiscal Stabilization Funds that will not be available starting in 2011-12.

The report notes that Corbett will be limited in how deeply he can cut education because of mandatory pension costs and property tax hike caps on local school boards.

The Department of Environmental Protection report details the Rendell administration's efforts to clean streams and curb air pollution and lists major investments in alternative energy.

For instance, since 2003, the state's $387 million investment in new energy programs - such as solar and wind - leveraged millions more in private funding and created or retained thousands of jobs.

But the report concludes that municipalities still need $37 billion in sewer and water supply upgrades and millions more to continue hazardous site cleanup programs.

The Department of Conservation and Natural Resources predicted $107 million more is needed to fix failing infrastructure in state parks, such as bridges and dams.

Agencies - such as the Pennsylvania State Police and DEP - warned that reductions that have occurred or are imminent in the numbers of troopers and mine inspectors could mean more threats to public safety and the environment.

Harley said he is aware that most agencies have said they need more money to do what they need to.

But the reality, he said, is that the state "can no longer continue to spend money at rate we have been."

"It's obvious we will have to reduce the size and cost of state government over next several years."