Editorial: On time, but not much more

It figures the legislature and Gov. Rendell needed a little bit of accounting fraud to agree on a rare timely state budget.

After they missed last year's June 30 budget deadline by 101 days, nobody in Harrisburg wanted a similar embarrassment in this election year. And slumping tax collections left little money to fight over.

So the Republican-led Senate and the Democratic-controlled House agreed with the governor on a $28 billion budget Wednesday. They beat the deadline for the first and last time in Rendell's eight years as governor. Lawmakers passed the measure with hardly any debate.

The plan contains no broad-based tax increases, and it raises spending only 0.6 percent over last year. School districts will receive $250 million more in basic education subsidies.

But the legislature and governor imposed cuts of 7 to 12 percent on libraries, state parks, health-care centers, the Department of Environmental Protection, and other agencies. About 1,000 state employees will be laid off.

It's an austere budget, but it's also a fiction.

State law requires a balanced budget, and this spending plan is $850 million short. The legislature and governor are pretending that the state will receive $850 million from the federal government in extra Medicaid funds.

Congress might yet come up with the money, but the U.S. Senate has already failed once to approve the aid for Pennsylvania and 29 other states. So counting on this pot of money to balance the budget is election-year smoke and mirrors.

If the federal government doesn't come through with some or all of that money, Rendell and the legislature will need to go back to the chopping block. One thing they'd likely cut is the $250 million increase for schools. Rendell says he will then have to lay off thousands of state workers.

Senate Republicans did agree to impose a long-overdue production tax on natural-gas drillers in return for an on-time budget. But rather than approve this needed revenue now, legislators pledged to act on the severance tax by Oct. 1, with the tax to take effect sometime after Jan. 1, 2011.

That bit of unfinished business will need close scrutiny. A tax could generate more than $100 million annually, with an undetermined portion going to affected municipalities. But the industry has been lobbying for a bill that would include some lucrative loopholes, such as preventing the tax from taking effect for several years and exempting some wells altogether.

Legislators could have softened the budget blow further by adding targeted taxes on tobacco products, and by closing some business tax loopholes. But this is an election year, and profiles in courage are scarce.

A grand jury report recently pointed out the massive waste in the legislature. But legislators didn't show much appetite for cutting their own budgets in this year that's tough for everyone else.

The governor's office will be cut 7.5 percent. But the House and Senate budgets are each being cut less than 1 percent, and a "miscellaneous" legislative line-item was increased 19 percent (mostly for the reapportionment commission that engages in the task every 10 years of drawing new district boundaries to protect incumbents). Meanwhile, the legislative leaders' slush fund appears to have increased from $180 million to $200 million.

Yes, the budget is on time for once. Otherwise, it's nothing to be proud of.