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Pa. Senate GOP, Rendell on crash course

Republican budget has no tax hike, cuts governor's spending

HARRISBURG - A Republican-penned spending plan that allows no tax increases and slashes 5 percent from Gov. Ed Rendell's proposal could pass the state Senate by mid-May, a top state senator said Monday.

The Senate GOP plan will establish the battle lines of a partisan clash with the Democratic governor and Democratic-controlled House over the next two months, as legislators prepare to negotiate a recession budget ahead of the new fiscal year that begins July 1.

Senate Appropriations Chairman Jake Corman, R-Centre, said the Republican plan seeks to stop spending growth at a time when the bottom has fallen out of Pennsylvania's tax collections.

He criticized Rendell's plan as an economic disaster in the making, saying it would use rosy revenue projections, reserves and temporary federal aid to accelerate spending beyond the ability of current tax collections to catch up.

Across the country, many states are cutting spending and draining reserves to eliminate shortfalls created by sluggish tax collections.

In Pennsylvania, cutting spending is likely to affect public schools, hospitals, nursing homes, counties and others that rely heavily on the state for help providing services.

On the chopping block also may be hundreds of millions of dollars in grants, tax breaks and more that Rendell and legislators routinely deliver to community nonprofit groups, businesses and local governments. The cuts also may seek substantial reductions through attrition in the state's work force.

In February, Rendell proposed a $29 billion plan, a spending increase of 4 percent with the biggest boosts for public schools and the state's Medicaid program.

The proposal relies on the help of federal aid, cash from the state's budget reserve and higher taxes on health insurance premiums, natural gas extraction and tobacco sales.

The Senate GOP's approximately $27.5 billion spending plan will demand about $1.5 billion in cuts while rejecting Rendell's proposal to boost taxes and tap the state's budget reserve fund. It will still rely on about $2 billion in federal budget aid to Pennsylvania, Corman said.

He said he hopes it will pass the chamber by May 13, when the Senate takes a two-week break from Harrisburg. If it passes the Senate, it will land in the House, where Democrats have not sworn off a tax increase of some sort.

A spokesman for House Majority Leader Todd Eachus, D-Luzerne, said Democrats would look at how the Senate GOP proposes to cut spending and seek to preserve essential services for the vulnerable, including children and the elderly.

"We believe that if cuts are to be made, they should be made responsibly," spokesman Brett Marcy said.

Corman would not detail how the Senate GOP plans to cut spending and he declined to provide a copy of the plan.

But he warned that an austere budget cannot wait because public employee pension contributions and health care costs for the poor, disabled and elderly are projected to increase.

"It's going to be tough to find those kind of cuts in the budget," Corman said. "But what I'm telling you is ... we absolutely have to do it, we absolutely have to do it now to get our economic house in order to plan for the future."

At the same time, Rendell and legislators must address a massive shortfall in this year's budget. Legislators now predict this year's shortfall will reach $2.6 billion.

That figure is among the largest nationwide in dollars, but is not among the biggest in percentage, according to figures compiled by the National Conference of State Legislatures.

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