HARRISBURG — Last year's budget negotiations led to furloughs for thousands of state workers and a partial government shutdown.

On Tuesday, Gov. Ed Rendell took the first step toward a $28.3 billion spending plan for 2008-09 with a budget address that made several references to bipartisan cooperation in the face of a potential economic downturn.

"Because of the conditions that exist today, the people of Pennsylvania are watching us more closely than ever to see if we can put aside our differences and get things done," Rendell told the General Assembly as he outlined a plan to increase spending by $1.1 billion, or 4.2 percent.

Much of what the Democratic governor wants to get done consists of proposals he put forth in prior years that have not made it out of the Legislature — extending health insurance to all state residents, spending $850 million to make the state more energy independent and borrowing $1.25 billion to underwrite development projects and build medical research facilities.

"We have discussed and debated many of these ideas for months and months, and it is now time to act," Rendell said. "Our state's economy, and the millions of lives that are tied to it, demand that we take these necessary steps as quickly as possible."

The most notable new initiative was a plan to give 475,000 lower-income families one-time payments of as much as $400 to stimulate the state's economy as the specter of recession looms. It would be financed with $130 million from the state's "rainy day fund" budget reserve and have an income eligibility limit of $32,000 for a family of four.

Republicans, who control the Senate and hold a slim minority in the House, hardly raced to embrace the idea, and House Minority Leader Sam Smith, R-Jefferson, said avoiding a repeat of last summer's budgetary train wreck would "depend on whether the administration is willing to back down from some of the spending and taxes."

Rendell is asking to increase the state's debt limit by $750 million for civic development projects, which would mark the fourth time the debt ceiling has been lifted since he took office.

He also wants to borrow $270 million to rebuild bridges and make other infrastructure improvements.

Rendell's budget would require targeted tax increases, including a dime-a-pack boost in the cigarette tax to help pay for the plan he introduced last year to extend health benefits to 760,000 uninsured adults.

The governor's budget also provides $100 million to expand a program that helps prepare abandoned sites for use by businesses. And a proposed slowdown in the ongoing phase out of the Capital Stock and Franchise Tax would free up $40 million for hazardous-waste cleanups.

For public schools, education subsidies would go up by nearly 6 percent, or $291 million. Additional tens of millions of dollars are earmarked for a preschool initiative, the purchase of laptop computers, special education and reimbursements for charter schools.

Libraries, community colleges, higher-education grants and universities also would get larger state subsidies.

He also proposed adding a new assessment on all property-insurance policies — 7 cents per $100 in premiums.

Highlights of Gov. Ed Rendell's 2008-09 budget proposal:<B>SPENDING</B>• Increases by 4.2 percent to $28.3 billion in the year that begins July 1.<B>TAXES</B>• Increases cigarette tax by 10 cents a pack and extends new taxes to other tobacco products for the first time to help pay for the Cover All Pennsylvanians health-insurance initiative that Rendell originally introduced last year.• Levies a new "public benefits charge" on electricity usage — 0.05 cents per kilowatt hour, or about 50 cents a month for the average residential customer — to fund an $850 million bond issue that would finance the governor's energy-independence initiative, also introduced last year.• Slows down the ongoing phaseout of the Capital Stock and Franchise Tax in 2009. The resulting $40 million would be used to finance hazardous-waste cleanups.• Imposes a new assessment on all property-insurance policies — 7 cents per $100 in premiums — to raise about $3 million a year for local flood-control projects. A homeowner who pays $600 a year on home insurance would see a 42-cent increase if his insurer passes along that cost, according to the state Insurance Department.• Increases the job creation tax credit from $1,000 per employee to $3,000 per employee during the first year of employment.<B>ECONOMIC STIMULUS</B>• Provides one-time payments of as much as $400 to 475,000 working poor families, using a $130 million withdrawal from the state's rainy day contingency fund. The annual income cutoff for a family of four would be $32,000.• Increases the state's debt limit by $750 million — to $3.4 billion — to expand construction of public facilities across the state. It would be the fourth increase in the debt ceiling since Rendell took office in 2003.• Authorizes a $270 million increase for infrastructure work that includes repairing and building bridges, flood-control projects, repairs to state-owned dams, rail-freight projects and airport improvements.• Provides $100 million to expand a program that helps prepare abandoned sites for use by businesses.<B>EDUCATION</B>• Increases basic education subsidies by $291 million, or nearly 6 percent, the largest increase in more than two decades.• Boosts spending for special education by $30 million, or 3 percent.• Increases reimbursements for charter schools by $36 million, or nearly 23 percent.• Expands spending for the Pre-K Counts early childhood program by about $13 million, or nearly 17 percent.• Provides 3 percent increases for the state's community colleges and the 14 state-owned universities that make up the State System of Higher Education.• Provides 1.5 percent increases for Penn State University, the University of Pittsburgh, and Temple and Lincoln universities.<B>PUBLIC SAFETY</B>• Doubles spending to put more police on the street to $20 million, allowing the hiring of 200 additional officers across the state.Source: Rendell administration

This is the proposed basic education money for school districts included in Gov. Ed Rendell's budget announced Tuesday. The districts will receive additional instructional money for services such as charter school tuition and special education.District 2008-09 BEF Percent increase from 2007-08A-C Valley $5,613,747 1.65%Butler $23,815,390 3.87%Karns City $9,259,849 2.86%Freeport $6,271,126 3.21%Grove City $7,704,858 3.97%Mars $5,587,404, 2.81%Moniteau $7,458,597 4.62%Seneca Valley $12,961,654 2.83%Slippery Rock $7,976,651 4.18%South Butler $7,231,060 3.94%Union $5,327,415 1.5%Source: Pa. Department of Education