Rendell orders spending cuts to save $200 million
HARRISBURG — Gov. Ed Rendell ordered an immediate hiring freeze, a ban on out-of-state travel and other spending cuts to save $200 million on Tuesday. He said the moves were needed to maintain a balanced budget as the weakening national economy starts to affect Pennsylvania.
"To make sure the commonwealth's budget remains in balance, we need to reduce spending now," Rendell said.
The hiring freeze will leave about 5,000 vacant state jobs unfilled, a Rendell spokesman said. The travel ban applies to state employees, board members and commissioners.
The Democratic governor said he was asking Cabinet secretaries to cut as much as 4.25 percent from their budgets, but stressed that he would maintain critical services such as public safety, health, social services and education.
Rendell said his order was not intended to fill any gap in the current $28 billion state budget, but was meant as a precautionary measure to ensure that the state doesn't run up a deficit during the 2008-09 fiscal year. Any money saved will be placed into a reserve fund, Rendell said.
Pennsylvania's unemployment rate rose to 5.4 percent in July, and revenue collections through August are 3.3 percent below projections.
That sluggish trend is continuing, based on collections for the first two weeks of September, Rendell said.
The current budget draws heavily on one-time dollars from tapped surpluses and relies on the state postponing certain payments.