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Budgeting for the states

December 30, 1998

Unlike their Maryland counterpart Parris Glendening, who's pressing ahead with plans for millions in new spending, caution is the watchword for the governors of Pennsylvania and West Virginia.

For Pennsylvania Gov. Tom Ridge, the possibility that he'll be tapped for the No. 2 spot on the Republicans' next presidential ticket may keep him from renewing some of the battles of years past on issues like school vouchers. But for West Virginia's Cecil Underwood, the prospect that there'll be a slowing of the national economy even as health-care costs continue to climb will probably doom any plans for new spending programs.

Ridge's most controversial initiative in 1999 may be his push for $300 million in public help for four new stadiums in Pittsburgh and Philadelphia. In a session with state house reporters, Ridge conceded that selling this idea to a skeptical public will be an uphill battle.

The more popular initiatives of his first term - tax cuts for business and the working poor, electric power deregulation and anti-crime measures - will get as much or more emphasis as they did previously, Ridge said. The more controversial plans - funding school vouchers and selling the state's liquor stores - probably won't.

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Underwood faces an economy expected to generate just 2 percent more income than last year and the necessity of finding $40 million in new money to pay for a $750-per-person pay raise for state employees and teachers. In addition, the Public Employees Insurance Agency, which provides health care, is facing a $48 million deficit by the end of fiscal 1999. And state revenue officials are expecting no surplus at the end of this year.

Put all that together, and according to House Finance Committee Chairman Harold Michael, something's got to give. Maybe it will be an increase in employees' share of health costs, or perhaps the first tax increase in five years. But whatever happens, Gov. Underwood can only envy his Tri-State area counterparts, who are in the enviable position of being able to increase spending without increasing the taxpayers' pain.

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