Pa. Legislature finally reaches budget deal

HARRISBURG, Pa. (AP) — Gov. Ed Rendell and legislative leaders reached a budget deal Friday to end Pennsylvania’s distinction as the last state still fighting over its annual spending plan.

Details were scanty. Rendell said he did not want rank-and-file lawmakers to learn about them in the media, but said it was a roughly $28 billion plan that would raise tax rates on businesses and cigarette sales and would draw more than $1.5 billion from state reserves.

The agreement, which still requires legislative approval, also would raise money from legalizing table games at the state’s slot-machine casinos, extending the state sales tax to concert and theater tickets and leasing more state forest land for natural gas exploration.

“There are no winners and losers in this,” said Rendell, flanked by leaders of the House Democrats and Senate Republicans. “I know it’s hard for the people of Pennsylvania to accept the fact that they are the winner, but they are.”

The deal would slash spending by about 1 percent, but will not raise the state income tax or sales tax rates. It remained unclear Friday exactly which programs would be cut, and by how much.

The breakthrough followed months of negotiations over whether to fill a multibillion-dollar budget deficit through cuts, higher taxes or a combination of the two. Pennsylvania has been without a comprehensive budget since its fiscal year began July 1, although Rendell signed a partial budget to pay state workers and fund billions in spending.

While negotiators struggled for common ground, checks were cut off to the hundreds of private organizations and businesses that make up Pennsylvania’s social safety net, forcing them to take out loans, lay off workers and shut down services to stay open.

“It is my hope that we can, as quickly as possible, get a signed budget so we can begin to have money flow to the many groups and organizations that are in desperate need of an infusion of cash to keep doing the things that they do so well for us,” Rendell said.

A week ago, leaders of the House Democrats and of both parties in the Senate announced a $27.95 billion budget deal that included $1.2 billion in recurring revenues — mostly new taxes. However, Rendell threatened to veto it unless it had a more reliable revenue foundation and spent more on health care, education and financial incentives to encourage businesses to expand in Pennsylvania.

At Friday night’s news conference, Rendell said the new deal met those criteria, while adding revenue to that previous agreement.

Substantial work remains before the budget can pass, including settling how money will be spent on hundreds of programs and moving a package of bills through both chambers.

Assuming the agreement holds, that work may take about two weeks before it can be signed by Rendell.

“We have a lot of legislative traffic to run,” said House Majority Leader Todd Eachus, D-Luzerne.

House Republican leaders do not support the agreement, saying it allows too much spending and tax increases that they oppose.

“As unemployment goes up and revenues go down, it is the wrong time to take more money out of people’s pockets,” said Steve Miskin, a spokesman for House Minority Leader Sam Smith, R-Jefferson.