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Economy could dog lame-duck Rendell Analysis

The state’s fiscal woes might impact governor’s bid to fund schools, insurance and roads.

HARRISBURG — The talk in the Capitol these days is how to close a yawning budget deficit with cash reserves and cutbacks, but still-looming decisions could have tremendous impact on Pennsylvania’s public schools, highways and state residents seeking health coverage.

Debate on those issues has been put on hold while Gov. Ed Rendell’s administration assembles a new spending plan and until the new two-year session of the Legislature gets under way next month.

The next direction is likely to arrive Feb. 3 when Rendell hands his 2009-10 budget proposal to the Legislature, and the Democratic governor’s press secretary Chuck Ardo says the key decisions are being made right now.

The lousy economy notwithstanding, Rendell wants to pour dollars into public schools, expand the state’s health insurance program for low-income adults and find major new money for the state’s highways, bridges and mass transit agencies.

All three subjects have been the focus of much work already, and are top Rendell priorities heading into the spring budget season and his final two years in office — a period when a sitting governor’s power to dictate policy traditionally is on the wane.

In July, Rendell succeeded in winning a historic funding increase of $274 million, or 5.5 percent, in the 2008-09 budget for public school instruction and operations. That was a baby step toward raising state support for public schools after a state-commissioned study said another $5 billion is needed each year to educate students sufficiently so they meet the state’s academic expectations.

Rendell has pressed hard for more transportation funding, but few Republican or Democratic legislators warmed to his idea to privatize the operating rights to the Pennsylvania Turnpike. Instead, legislators produced a plan — tolling Interstate 80 — that was rejected by the federal government in September, leaving the state without a long-term transportation strategy.

The governor also has been stymied in his effort to get legislators to agree to various plans to expand subsidized health insurance to more adults who cannot afford it. His last attempt ran into the Senate’s Republican majority, which called his ideas ill-conceived and way too expensive. In the meantime, the waiting list to get into Pennsylvania’s basic health insurance program continues to grow.

Whatever plans Rendell announces in six weeks, his final two years are likely to be dogged by the state’s miserable revenue outlook — perhaps more so than the perception among legislators that he is in the so-called “lame duck” period.

“More serious and more debilitating to Rendell than being a lame duck is being a man without money,” said G. Terry Madonna, director of the Center for Politics and Public Affairs at Franklin & Marshall College in Lancaster.

In one way, Rendell might remain as relevant as he was during his first six years as economic doldrums force the Legislature and governor to work closely together to deal with the fallout, Madonna said.

Pennsylvania also might get some help for its beleaguered highways from a federal infrastructure bailout. Rendell also might be able to help the uninsured by tapping reserves built up during a political stalemate with Senate Republicans.

Still, deficits won’t help Rendell get his priorities through the Legislature, and the economy is showing no signs of improvement.

Pennsylvania’s job losses continued to accelerate through November. Ardo said Friday that Pennsylvania’s December revenue collections look likely to add another $100 million or more to the state’s shortfall, bringing it to about $800 million with half the July-June fiscal year still ahead.

Despite the grim outlook, House Majority Leader Todd Eachus, D-Butler Twp., said Rendell’s goals are not impossible. He says meeting them will hinge on cooperation and discipline in the Legislature.

Senate Appropriations Chairman Jake Corman, R-Centre, whose caucus has fought many of Rendell’s proposals and forced him to compromise many times over, was less certain.

Corman doubts the state can pump hundreds of millions of dollars more into public schools next year without a broad-based tax increase — an avenue that Rendell and legislative leaders of all stripes have said they won’t travel.

For now, Rendell is showing no sign of backing down from his priorities, and his top aides say another two years of political stalemate or policy flops is unacceptable.

“2009 is going to be a year of difficult decisions,” said Rendell’s secretary of legislative affairs, Steve Crawford, “but it has to be a year of decisions.”

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