PENNSYLVANIA STATEHOUSE GOP's latest budget plan still leaves school funding standing in limbo

The Republicans said it wasn't a final offer.
HARRISBURG (AP) -- Two days after Gov. Ed Rendell expressed frustration that he didn't know where Senate Republican leaders stood in a tug-of-war over the incomplete state budget, they released a negotiating position Thursday that leaves hundreds of millions of dollars in new education funding standing between the sides.
With both sides setting the end of the year as a sort of deadline for getting a deal done, the budget "framework" proposal did not substantially advance the Senate Republicans' position from where it's been the last half year.
"This isn't a final offer," said Erik Arneson, the chief of staff for the Senate Republican leader, David J. Brightbill. "I'd call it a starting point" for negotiations.
Going without
As the dispute drags on, schools are going without more than $4 billion in state subsidies -- an average 35 percent of school budgets statewide -- that Rendell used his line-item veto power to strike from the $21 billion budget as a way to force Republicans to consider his proposed education programs.
Mike Manzo, the chief of staff for House Democratic leader H. William DeWeese, said that "this was not a bomb dropping, but it was the other shoe."
The Rendell administration said in a statement that the "framework does little more than maintain the status quo for our schools without addressing our structural budget deficit." Senate Democrats expressed surprise, saying that it didn't resemble the deal they have been negotiating separately with their Republican counterparts.
Tax increase
Rendell has sought an income tax increase to fund new education programs and ensure that the state's revenues can keep up with rising costs, such as prisons, health care and pensions. Republicans have resisted an income tax boost, which they say is too punishing during a period of job losses, and contend that the administration has overestimated the deficit.
The Senate GOP proposal would raise $567 million through a grab bag of higher taxes and fees, including those on telephone calls, liquor and administrative filings with the state.
It would spend $364 million of that money, including $174 million to restore budget cuts to libraries and social services and $190 million to cover a rate-of-inflation increase for education spending, tutoring programs, and grants for struggling districts. The rest would be reserved as a cushion to cover the deficit or other spending, as would more than $900 million in federal budget aid.
Spending bill
Last month, the House passed a $1.1 billion spending bill that had been agreed to in advance by Rendell, but which is now stalled in the Senate. To get that deal, Rendell bargained down from spending $560 million on his education plan to $250 million.
That bill would have spent $200 million on education for a rate-of-inflation increase and an additional $250 million on new learning programs, such as tutoring for poor districts, full-day kindergarten and reducing class sizes through third-grade.
Such programs are proven to raise students' test scores in later grades, Rendell has said.
Restoring cuts
That deal also included restorations of about $300 million in cuts. To help pay for it, the state would boost a variety of taxes and fees, including the income tax, which would rise from 2.8 percent to 3.25 percent Jan. 1, then roll back to a permanent level of 3.1 percent on July 1.