Rendell proposes more cuts

HARRISBURG (AP) — Hospitals and doctors who treat the poor, libraries, major universities and college students seeking grants would all feel the pinch of a newly revised budget Gov. Ed Rendell unveiled Friday.

Under the additional $500 million in proposed cuts, the Rendell administration would be unable to add high-tech classrooms in public schools while waiting lists for mental-health counselors and community homes for the mentally retarded might lengthen.

The cuts, said Rendell, are “significant, severe and painful,” even though they do not go nearly as far as Republican legislators want.

“There’s not a thing in here that doesn’t hurt; there are virtually no good cuts,” Rendell said. “I could go on and on, but there’s nothing in here that I like in the slightest.”

Still, Rendell refused to budge on a proposed 7 percent state funding increase for instruction and operations in public schools, insisting that the recession not waylay his top priority of improving their quality.

The cuts are the latest fallout from Pennsylvania’s recession-wracked tax collections, as state policy-makers grapple with an expected $3 billion-plus shortfall.

Despite the cuts, the higher-than-expected cost of state tax refunds and health care for the elderly, poor and disabled would keep Rendell’s total proposed spending at just below the $29 billion he originally requested for the fiscal year beginning Wednesday. That would raise spending about 2 percent above this year’s approved level.

To help support his proposal, Rendell is pushing for a 16.3 percent increase in the state’s personal income tax — a major sticking point with top Republican legislators. Instead, they are pressing for a bare-bones spending plan that would raise no taxes and would reduce spending by more than 4 percent below this year’s approved level.

The state’s 2009-10 fiscal year begins Wednesday. With the sides miles apart on a budget agreement, large segments of state government will lose the legal ability to pay bills and distribute subsidies. Bond payments, welfare checks and pensions will continue to be sent out as usual, as negotiations are expected to push deep into July.

If the sides agree on anything, it is the need to draw from the state’s reserves.