Governor: Layoffs, new taxes may fill Pa. budget gap

Associated Press

HARRISBURG

With Pennsylvania facing a $1 billion-plus deficit for the second year in a row, Gov. Ed Rendell called on legislators Monday to increase taxes to limit the number of state employee layoffs or furloughs that are likely to result from spending cuts.

Rendell made the comments after the state government’s disappointing tax collections in April threw the state budget further out of balance and squashed Democrats’ hopes that the month would begin a turnaround from two years of recession-driven shortfalls.

Through the first 10 months of the budget year, Pennsylvania is facing a $1.1 billion shortfall.

Rendell said the Legislature should contribute a portion of its reserve that is expected to be about $180 million by the June 30 end of the fiscal year.

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