Rendell Announces Latest Round of Budget Cuts

HARRISBURG – Gov. Edward G. Rendell today released a list of cuts totaling $500 million to his proposed 2009-10 fiscal year budget. Combined with more than $500 million in spending eliminated during the current fiscal year, plus other reductions that he previously announced to his projected budget, the Governor has now trimmed $2 billion from state spending during the current national economic downturn.

“Like so many of the cutbacks that we have made before, these reductions are painful to me and I understand they will be painful to the people who benefit from the affected programs. But the reductions are necessary,” Rendell said. “I want Pennsylvanians to know that we continue trying to spread the burden of balancing our budget as fairly and evenly as possible.

“This proposal cuts or completely eliminates nearly 80 percent of all General Fund budget lines from their current level in the budget that was signed into law last July. Twenty-six percent of all budget lines are completely eliminated and of the remaining appropriations that we propose to fund, 70 percent will be reduced from their 2008-09 enacted budget levels,” the governor said. “We cut further, accepted or partially accepted 53 percent of the cuts that were proposed in Senate Bill 850.”

Overall, 229 line items would be impacted by the latest round of spending reductions. Compared to the current fiscal year, the governor has now cut three out of every four line items, totally eliminating 163 of them and reducing another 328.

While making the cuts, the governor preserved funding for K-12 education, economic development programs that are crucial to helping the state pull out of the recession, and key social safety net programs. He avoided actions that could lead to higher property taxes at the local level, or the elimination of services to the most vulnerable citizens of the state.

In addition to further across-the-board reductions to General Government Operations lines for state agencies, the governor also:

-Eliminated all funding for Classrooms for the Future ($22 million);
-Preserved funding for public colleges in the State System of Higher Education, community colleges and the Thaddeus Stevens College of Technology, but reduced by 13 percent, support for state related universities — Penn State, the University of Pittsburgh, Temple University and Lincoln University;
-Eliminated appropriations for museums throughout the state;
-Reduced spending on Pennsylvania Higher Education Assistance Agency grants to students by about $45 million and institutional assistance grants to independent universities by more than $7.5 million;
-Cut customized job training funds by $9 million;
-Reduced the proposed level of funding for mental health services by $8.5 million; and
-Cut $7.5 million from the public library subsidy.

“I remain committed to adequate support for the programs that are an essential investment in our future and that will improve our economy over the long term,” Rendell said.

The governor also announced that Pennsylvania will submit its federal stimulus State Fiscal Stabilization Fund application today, prior to the June 30 deadline. Of Pennsylvania’s total 2009-10 allocation of $953 million, the application uses approximately 18 percent, as allowed by federal law, to provide general budget relief ($173 million to help meet mandated correction costs). The remainder is intended for education, and the state will dedicate:

-$418 million for the second year of Pennsylvania’s school funding formula in order to keep local property taxes down;
-$77 million to restore proposed cuts to the State System of Higher Education, community colleges, and Thaddeus Stevens College of Technology; and
-$285 million in one-time grants to school districts to help districts close their budget shortfalls and make one-time investments.

The federal application can be amended when the final state budget is enacted.

EDITOR’S NOTE: The list of additional cuts is available online (in the “Current and Proposed Commonwealth Budgets” section).

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