Rendell Orders Cabinet to Deliver Another $500 Million in Budget Cuts

HARRISBURG – Responding to a deepening budget crisis and a constitutional requirement to balance a $3.2 billion revenue shortfall, Gov. Edward G. Rendell convened a rare emergency cabinet meeting and gave each cabinet member specific targets for cutting an additional $500 million from next year’s state budget.

Rendell said he recognizes his proposal for $2 billion in spending cuts is severe and will undoubtedly raise objections from those who will be impacted. But unlike the Republican plan to reduce the budget by $1.7 billion, the Governor’s $2 billion in spending reductions are spread carefully across the board to avoid the deep and extreme cuts to education and economic development initiatives.

“While I agree that we must make dramatic cuts to balance our budget, I am taking a vastly different approach. The Senate Republican plan is full of harsh and debilitating cuts to education and economic development initiatives that will cause local property taxes to soar and cost the state thousands of more jobs,” Rendell said.

“Balancing the budget by forcing local communities to raise property taxes is the cowards’ approach. I was not elected to make politically convenient decisions that would put concerns about the next election ahead of the needs of the next generation,” added Rendell.

He also pointed out that the $27.3 billion budget plan passed by Senate Republicans in early May is already a billion dollars out of balance because revenues have continued to decline while the national recession persists. Thus, their budget, as is, would not be a workable alternative unless they raise more money in taxes.

The governor instructed his cabinet secretaries to adopt his suggested reductions or come back quickly with other ideas that meet his targets for each agency. He acknowledged that this is a difficult task, and additional reductions will require surgical-like precision.

The governor first sliced $500 million from the current fiscal year’s budget in late 2008. He proposed another $1 billion in spending reductions during his February budget address. The $500 million in reductions he identified today brings his total cuts to $2 billion.

Rendell expects to meet with legislative leaders in the very near future to discuss his final list of spending reductions to balance the budget for the 2009-10 fiscal year that begins July 1.

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