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Rendell: Budget gap worsening, workers to lose jobs

He said estimated budget deficit for fiscal year has grown to $2.3B. Unpaid furloughs also possible.


HARRISBURG — Pennsylvania’s estimated budget gap has worsened by about $300 million just since last week, and some state government workers face layoffs, Gov. Ed Rendell said Thursday.

“There will be some layoffs and there will be universal pain,” Rendell said at a Capitol news conference. “I don’t want to hear whining. I think everyone has to tighten the belts.”

The number of layoffs has not been determined, but they will occur in the fiscal year that begins July 1, he said. He said unpaid furloughs also were “on the table” with unionized state workers.

The governor said the state’s estimated budget deficit for the current fiscal year had grown to $2.3 billion, up from the $2 billion figure he announced during a Farm Show speech last week and from $1.6 billion last month.

The more pessimistic outlook stems from the latest sales tax and personal income tax revenue figures, Rendell said.

“It’s just a sign of the times,” he said.

He said he expects program cuts to be painful but not debilitating.

“Some of them deserve to be eliminated and probably should be eliminated forever, but some of them, at the first sign of recovery, we can replenish in future years’ budgets,” he said.

Rendell said he will use more of the expected federal stimulus money in the current fiscal year than he previously intended and asked the Legislature to draw down its reserve fund by $175 million to help plug the hole.

“The lion’s share of it should be given up,” he said.

Legislative leaders have defended their surplus as a financial bulwark to prevent the governor from squeezing them during a budget showdown.

Steve Miskin, a spokesman for House Minority Leader Sam Smith, R-Jefferson, said protection of their independence requires a four-to-six-month reserve. “Beyond that, we are willing to turn over, to turn back” the unspent funds, he said.

New taxes on smokeless tobacco and Marcellus Shale natural gas royalties may be ahead, but Rendell vowed not to pursue a broad-based tax increase.

“The Legislature could pass one, but I am not going to submit a budget on Feb. 4 that has a broad-based tax increase in it. That’s about as clear as I can get,” he said.

He said the Marcellus Shale tax should be in line with what currently exists in other states.

Rendell said he was determined not to use the federal stimulus money as a short-term fix that would delay tough choices.

“I could use this money to get through this year and next year, and then I could, the year that I leave, hand my successor a huge budget deficit,” he said. “It’s my resolve not to do that.”

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