Rendell likely to sign interim budget

HARRISBURG - Gov. Rendell will sign a greatly reduced interim budget next week that will allow most state employees to be paid but will not provide billions in spending for education, health care, and human services, he said yesterday.

Under his plan, Rendell said, he would ask the Democrat-controlled House to send him the $27.1 billion budget authored by Republicans who control the Senate. He would then strike all but about $4 billion in spending, enough to maintain essential government operations, including public health and safety.

The governor stressed that his action was only a short-term solution to the budget impasse, which has entered its fifth week. He still holds out hope that an agreement on a complete 2009-10 spending plan can be reached soon, he said.

A conference committee of House and Senate leaders met yesterday and is scheduled to meet again today to try to arrive at a deal.

If the committee makes little progress, Rendell said, he will ask for the temporary measure, vetoing the vast majority of the 700 line items in the Republican proposal.

"I want to stress this will not be a final budget," he said at a Capitol news conference. "This is a way to get our state employees paid."

Senate Majority Leader Dominic Pileggi (R., Delaware) called Rendell's plan appropriate to resolve the worker-payment issue.

"It has the obvious important advantage of allowing state workers to be paid and government operations to continue, which I support," Pileggi said. "It has the downside, of course, of delaying the inevitable day of reckoning."

Roughly 77,000 state workers have received partial pay - ranging from 20 to 70 percent of their checks - over the last two weeks, and about half of them are to receive no paycheck tomorrow. Payments to vendors were halted this month.

Most of those employees and vendors would receive back pay by early next month if Rendell signed the temporary measure.

That budget would not pay for schools, libraries, counties, and hospitals, or grants for the arts or state fairs.

Schools would be able to operate with revenue from local taxes, Rendell said, but other funding questions would have to be addressed as the administration and legislature continued negotiations on a final spending plan.

Pennsylvania's 67 counties, which provide many child and adult social services, would be poised to miss payments of hundreds of millions that come from the state in installments beginning in September.

Philadelphia anticipated getting no state revenue in September and planned accordingly, Finance Director Rob Dubow said. But the city still will not be able to pay vendors, he said.

Brett Marcy, spokesman for House Majority leader Todd Eachus (D., Luzerne), said House Democratic leaders hoped a budget deal could be reached by the six-member conference committee before Monday. Other House members of the committee include Appropriations Chairman Dwight Evans (D., Phila.) and Minority Leader Sam Smith (R, Jefferson). In addition to Pileggi, the Senate members are Appropriations Chairman Jake Corman (R., Centre) and Sen. Jay Costa (D., Allegheny).

"We continue to believe the best solution to our budget crisis is a permanent one," Marcy said.

After he watched the opening 90 minutes of the first conference committee meeting yesterday - when members of the four legislative caucuses argued about where to meet and who could attend - Rendell was less than sanguine about the prospect of a deal by Monday.

"I am deeply chagrined," he said. "We need both sides to be adults."

The deadline to pass a budget was July 1. Without a spending plan, the state operates under a diminished capacity to spend money.

The temporary budget would allow most state workers to start receiving full paychecks and most likely to get back pay by the second week in August. But that budget would zero out money for several state commissions, including the commissions for Women, African American Affairs, Latino Affairs, and the Council on the Arts. That could mean job losses.

Rendell spokesman Ken Snyder said yesterday that employees of those commissions would receive back pay, just like the majority of state workers. But it is unclear what would happen to those positions under a temporary budget or in the final budget.