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State budget deficit could hit $1.9 billion

HARRISBURG — Pennsylvania's 2008-09 budget shortfall could be as high as $1.9 billion as the national recession continues to take its toll on state tax collections, Gov. Ed Rendell said Thursday.

In a speech at the Pennsylvania Farm Show, Rendell boosted his deficit estimate and promised to advance proposals soon for plugging the latest budgetary hole, but provided no immediate details.

The threat of reduced state funding for the next year or two has sent fear through county governments, hospitals, nonprofits and everyone else who relies on the state's generosity.

The Democratic governor said last month that his administration was projecting a $1.6 billion deficit by the end of the fiscal year in June.

On Thursday, he said the administration now projects the deficit will be between $1.6 billion and $1.9 billion, and he repeated his warning that the state's ongoing efforts to close shortfalls projected for both this year and next year will inflict pain.

On Feb. 3, Rendell is scheduled to deliver his 2009-10 budget proposal to the Legislature, kicking off what some legislators expect will be the grimmest budgetmaking process in years, if not decades.

As of Dec. 31, the fiscal year's halfway point, state revenues were $815 million shy of projections.

Senate Republicans project this year's deficit will reach even higher — $2.1 billion — and one senator cautioned that efforts to patch over the deficit with reserves or found money will only postpone the inevitable.

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