State Budget Deficit Could Reach $2.5 Billion

At a Senate Appropriations Committee hearing today, Sen. Vince Fumo (D-Philadelphia) said the budget shortfall for the current fiscal year could be as high as $1.3 billion, even if the state used all of the $750 million now in the state's Rainy Day Fund.
Senate Appropriations Committee Majority Chair Sen. Gib Armstrong (R-Lancaster) said the current year deficit could be as high as $2.5 billion.
Budget Secretary Mary Soderberg did not speculate on what the ultimate shortfall may be, but acknowledged a $280 million reduction in state revenues so far. She also catalogued the steps the Rendell Administration has taken so far to reduce costs by $200 million and eliminate or not fill about 2,900 state worker positions.
Secretary Soderberg said she is continuing to work with agencies to cut operating costs by 4.25 percent across the board and freeze state employment.
She also noted that recent investments in alternative energy, sewer and water infrastructure and bridge repairs will help spur Pennsylvania's economy.
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