Governor Implements Plan To Make Up $280 Million Shortfall

Gov. Rendell announced in a press conference at noon he is implementing his original plan to make up for the $280 million shortfall caused by a reduced federal appropriation for Medicaid funding. That plan includes--
-- An across-the-board cut of 1.9 percent in the state budget that would yield $212 million: 1.9 percent cut to "discretionary appropriations," including $50 million to basic education funding; 1.9 percent cut to the General Assembly, Courts and to elected row offices (Auditor General, Attorney General and State Treasurer);
-- Using $70 million from the proposed Marcellus Shale natural gas production severance tax.
The Governor said the "good news" is there will only be about 100 state worker layoffs as a result of a higher than expected number of retirements-- 2,000 more than a normal year-- of which 600 positions will not be filled. He did not have a list of which agencies would still suffer layoffs.
Gov. Rendell also urged the Senate to pass House Bill 2497 (D.Evans-D-Philadelphia) to help deal with the state and school employee pension fund deficits and encouraged the Senate and House to use the $200 million in legislative account balances to help meet the pension deficits.
Late Friday, Senate Republicans wrote to Gov. Rendell agreeing with his suggestion to cut funding to certain line items and cutting $50 million in extra funds for basic education funding. But they went further and suggested the remaining $200 million in extra funding should be directed to deal with the school employees pension funding shortfall.
Transportation Funding
Capitalwire reported Gov. Rendell will present his plan to make up the transportation funding deficit on Monday at a meeting with House and Senate "transportation caucus." The Governor said at his press conference today he has scheduled a press conference for noon on Thursday on his transportation funding plans.
NewsClips
Rendell: Only 100 State Employee Layoffs Will Be Necessary
Rendell: All Agencies Must Cut Spending By 1.9 Percent
Rendell Proposes $50 Million Education Subsidy Cut