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Rendell: More budget cuts loom

More than $1 billion shortfall anticipated

HARRISBURG — Pennsylvania's state agencies are being asked to pinch pennies even tighter because of falling tax revenue, and Gov. Ed Rendell cautioned Wednesday that additional cuts are on the way.

"We are going to do everything we can to get through this with as little harm as possible, but I also want to remind people that the cuts are coming, and I don't want to hear any whining," Rendell said.

Rendell met Tuesday with his senior staff and developed a list of additional government spending cuts for Cabinet secretaries to consider beyond $311 million in potential reductions he identified last month.

He said the administration has not tallied the total savings suggested for its second round of cuts. The administration anticipates a budget shortfall of $1 billion to $2 billion by the close of the fiscal year that ends in June, Rendell said. Revenues from July through October were shy of projections by $565 million, or 7 percent.

Rendell added that he hoped to avoid imposing a "general, broad-based tax increase" to balance the budget either this year or in the 2009-10 fiscal year, but could make no guarantees.

Budget Secretary Mary Soderberg discussed the second round of budget cuts Wednesday at a House Appropriations Committee hearing on the economy. Soderberg told the committee it was early to make projections about a year-end shortfall, "but I want to stress, it doesn't look good."

Rendell said he has also asked Sen. Joe Scarnati, the Senate's highest-ranking Republican and the state's incoming lieutenant governor, to solicit budget-cutting suggestions from legislative leaders.

Scarnati said he had recently sent a letter to House and Senate leaders requesting a meeting to discuss the budget, and hoped to work with Rendell. "The governor and I both agreed that a meeting ... of all the parties involved is going to be necessary," said Scarnati, R-Jefferson.

Rendell already has frozen hiring and banned out-of-state travel. The state has roughly 5,000 job vacancies.

The governor said he has not granted any exceptions to the hiring freeze for openings within existing state agencies, but he has allowed the head of the state's new open-records office to hire all the employees she needs.

"We're letting them come up to speed, but if one of their personnel leaves ... they won't be allowed to fill that unless they qualify for an exception, and there are going to be exceptions," Rendell said.

The Department of Environmental Protection is also expected to add employees to inspect natural gas wells being drilled in the Marcellus shale, but the state expects to pay for them through a proposed increase in fees paid by drilling companies, Rendell said.

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