Yet again, a Pa. budget appears imminent

HARRISBURG - After several days of renewed doubt over a budget compromise, Gov. Rendell said yesterday that he was confident that only procedural details stand in the way of yet another push to end the 97-day state budget deadlock.

"I believe we're close to reaching a substantive budget agreement," Rendell said at a news conference late yesterday afternoon.

Moments earlier, House Democrats went so far as to say it was a done deal after unpopular taxes were dropped. Senate Republicans said they supported details of the revisions.

The proposal that emerged yesterday would total $27.8 billion - $110 million less than one they backed with Rendell on Sept. 18 - and would eliminate four controversial tax proposals. Remaining untaxed would be tickets to performing-arts events, museums, and zoos; small games of chance; smokeless tobacco and cigars; and natural gas extraction.

"When we took all four of those things off the table, this was a done deal," said Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee.

The deficit left by the removal of the unpopular taxes would be closed by a reduction in spending mostly in the Department of Public Welfare and the addition of a tax on managed-care organizations' Medicaid reimbursements, Senate Republican leaders said.

Rendell said he would meet with leaders of the four caucuses at the governor's mansion at 8 a.m. today to iron out details.

The latest deal, which comes three days after Senate Republicans proclaimed the Sept. 18 agreement was dead, hinged on the removal of the four taxes, two proposed by Senate Republicans and two counterproposed Friday by House Democrats.

An issue still facing lawmakers is what process they follow to pass the needed legislation. "Logistics is the only thing we have to do," said Evans, an assurance echoed later by Rendell.

But Senate Republicans - stung by what they viewed as House Democrats' reneging on the Sept. 18 agreement - were hesitant to pop any Champagne corks just yet.

"The House D's said there was a deal before, and we all know how that turned out," said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi (R., Delaware). "What they do is more telling than what they say. We are continuing on the path discussed earlier today."

Last night, the Senate began the process of moving a package of routine budget-related bills.

Rendell cautioned that the procedural details with moving the overall spending plan were not insignificant.

At issue is whether to move an agreed-upon spending bill through the special legislative budget conference committee, or to start with fresh legislation.

House Democrats are insisting on using the bipartisan, six-member conference committee, with members from both parties from each chamber, to speed the process along. Under that arrangement, the committee agrees on a common piece of legislation to be voted on by the respective chambers. The entire package could be done in a matter of days, they said.

However, Senate Republicans are criticizing the conference committee process so far and are insisting on a different route: passing each bill through the normal legislative process.

"The conference committee has been a very disappointing process, one that has been filled with delay and inefficiency," Pileggi said. "We do not want to participate in that sort of delaying action."

But doing so could take weeks.

"We want to get this done and get it done now," said House Speaker Keith McCall (D., Carbon). "We don't want to wait another three weeks or a month."

Unlike the Sept. 18 proposal, House Democratic leaders said yesterday that they had taken the latest offering to their members and the package has enough support to pass.

Even House Republicans, who until now have been uniformly opposed to the various budget proposals as having too many taxes and too much spending, showed openness to the latest plan. House Minority Leader Sam Smith (R., Jefferson) said the package showed "significant movement toward our position" by reducing spending and eliminating the controversial tax increases.

"I do think things are much closer and that's the first time I can say that," Smith said.

Also yesterday, a bill to add table games at casinos got preliminary House approval and is heading toward a final vote today.

But the bill, which could provide up to $240 million annually in new revenue, faces an uphill climb in the Senate.

Among other things, the proposal calls for a $20 million onetime licensing fee per casino and a 34 percent tax on table games - much higher than Senate Republicans said they were willing to consider.

Arneson called an agreement on table games "the thing farthest away from a resolution" in the budget talks.

"It remains a pretty high hurdle," he said.

Rendell, however, said the sides were nearing an agreement on table games. He would not elaborate.

Taxes dropped in latest agreement

Performing arts and museum tickets

Natural gas extraction

Small games of chance

Smokeless tobacco and cigars

Elements that remain in spending plan

25-cents-a-pack increase on cigarettes

New tax on small cigars

Expanded gas-drilling leases on state land

Suspension of phaseout of capital stock and franchise tax

Gross-revenue tax on managed-care organizations

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