Deal Ends Pennsylvania Budget Impasse

HARRISBURG, Pa. – Legislators and the governor brokered a deal to end the state budget impasse Monday night, allowing state workers to return to their jobs one day after nearly 24,000 people were sent home without pay.

Scores of state parks, state-run museums and driver-license offices around the state that were shuttered Monday on orders of Gov. Ed Rendell – after a partisan deadlock held up the budget nine days into the new fiscal year – will reopen.

“This is an agreement where all sides can say that they achieved some of their goals, and that’s probably a good budget agreement,” Rendell said, declaring himself “very satisfied with where we came out.”

The deal addresses some of Rendell’s health care and energy initiatives but will not impose the surcharge on electricity use the governor had sought, said Sen. Vince Fumo, ranking Democrat on the Appropriations Committee.

“I rate it good,” he said. “It’s a win-win for everybody.”

Budget Secretary Michael Masch said the budget total was about $27.37 billion, close to what Democrats had proposed.

The deal ended a tense day in the Capitol during which Republican House members took to the chamber floor for more than four hours, in a bit of political theater, to accuse majority Democrats of avoiding a showdown over a stopgap bill to pay state workers.

Despite the one-day partial shutdown, such critical services as health care for the poor, state police patrols, emergency response and prisons were maintained by the 52,000 workers whose jobs were designated as critical.

The total number of employees on furlough was 23,562, with total wages of $3.5 million a day, according to Rendell’s Office of Administration.

The administration had previously said furloughed workers wouldn’t be paid for the time off, but on Monday night Rendell said “options that we have to lessen the impact” were under consideration. He said he planned to announce something in the coming days.

Republicans won an increase in the Educational Improvement Tax Credit that fosters school choice and the rolling of $300 million of the surplus into next year’s spending, Fumo said.

“The governor proposed seven tax hikes,” said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, a Republican. “This agreement has zero.”

Among other things, Rendell, a Democrat, got a film industry tax credit capped at $75 million.

Assuming the massive transportation bill passes, spending for mass transit will not count against the budget. Rendell said new spending on highways and transit will average a total of $946 million a year over the next decade.

The governor called it “by far the most significant amount of money devoted to transportation needs in the commonwealth in the history of the commonwealth” and that it would shore up roads and transit for the next 10 or 15 years.

Rendell said the Legislature would convene a special session on Sept. 17 to address the energy topic, and that a Senate vote on $500 million for biotech investment would occur by Nov. 1.

The state also will help fund a new arena for the Pittsburgh Penguins and expand the Pennsylvania Convention Center in Philadelphia. There was not an agreement on a House-passed bill to add $500 million to the borrowing limit for redevelopment projects, but Rendell said the Senate would consider it at some point.

Pennsylvania’s five slots casinos came close to closing down during the budget stalemate because of Revenue Department furloughs, but a state judge put that decision on temporary hold, and the settlement made the issue moot.

The deal means a restoration of state services, putting thousands of Transportation Department workers back on the job during the height of roadwork season.

Pennsylvania wasn’t the only state dealing with a budget crisis. In California, Republican and Democratic leaders warned of a budget stalemate and said they likely won’t reach a deal on a $104 billion spending plan before hundreds of state employees stop getting paid this week.

California’s Republicans in the Assembly and Senate are pushing for a balanced budget – or $1.5 billion more in cuts than the Republican governor proposed in May.

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