HARRISBURG — Gov. Ed Rendell is delivering his annual budget speech for the last time as Pennsylvania faces a difficult financial future.

Rendell is expected Tuesday to call for higher spending on public schools and to discuss the massive financial problems looming for Pennsylvania after he leaves office.

The second-term Democrat is prohibited by the state Constitution from running for a third four-year term. That makes 2010 his last year in office.

The governor is expected to announce an approximately $29 billion spending plan for the fiscal year that begins July 1. That's an increase of about 4 percent.

But recession-ravaged tax collections are lagging behind expectations, which may make it challenging to absorb spiraling pension and health care costs.