Jun 30, 2009 1:30 pm US/Eastern
Governor Rendell: Pa. Budget Deal 'Unlikely'
HARRISBURG, Pa (AP) ―
Gov. Ed Rendell said Tuesday a state budget deal was unlikely to be hammered out this week or next, but characterized recent talks with legislative negotiators as productive.
"Last night's meeting was cooperative, the spirit of the meeting was good," Rendell said during a Capitol news conference.
The governor also said 10 banks and credit unions have agreed to help the 69,000 state employees who may soon have payless paydays by giving them loans or lines of credit.
Pennsylvania's budget year ends at midnight Tuesday, and Rendell said he was resigned to starting the new fiscal year without a spending plan in place for the seventh straight year.
The state has an estimated $3.2 billion revenue shortfall for the current year and a similar gap to fill for the 2009-10 year.
Rendell supports a mixture of cuts and higher taxes—including a three-year, 16 percent jump in the personal income tax—while Senate Republicans propose solving the problem by cutting spending and no tax increases.
"Our proposal is fair and equitable," Rendell said. "It's the best balance."
Rendell said he and legislative negotiators went through 358 of about 700 budget lines during a meeting at his Harrisburg residence Monday night. They are expected to resume that process later Tuesday.
Asked if he believes the sides are far apart, Rendell said:
"I'm not sure that it helps to characterize it."
State workers will not be furloughed, but they will receive only partial pay on July 17 and July 24, after which paychecks will be withheld entirely until the impasse is solved. They will then be paid retroactively.
Companies that do business with the state also may have to wait until a budget is in place before they will be paid.
The state's welfare checks, debt payments and pensions will continue to be sent out. Agencies such as the Liquor Control Board, which is self-funded, will not be affected. State parks will not close immediately, and many highway projects, paid for in the 2008-09 budget, will continue.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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