State Will Cut $250-260 Million, Not $850 Million

At a press conference call this afternoon, Gov. Rendell said as a result of action by the U.S. Senate, Pennsylvania will receive about 70 percent of the Medicaid Funds it was counting on to keep the state budget in balance.
As a result, the Governor said he would be meeting with legislative leaders next week to develop a plan to put $250-260 million in budgetary reserve, instead of the $850 million had Congress not acted.
Conveniently, the $250 million in extra funding put in the basic education line item would fill that hole nicely, although no one is sure whether the Governor will agree to use all that and avoid laying off additional state workers.
About 700 state workers were expected to be laid off to balance this year's budget without the additional $250-260 million in cuts planned to meet the now smaller Medicaid funding hole.
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