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Officials question rest of Pa. budget plan

March 05, 2003|by STACEY DANZUSO

chambersburg@herald-mail.com

HARRISBURG, Pa. - Some Franklin County legislators were supportive of the $21 billion budget Gov. Ed Rendell proposed Tuesday, but were questioning the second phase of the plan he expects to roll out later this month.

Rendell's budget blueprint would sustain most state programs for another year but indicated higher taxes, a bond issue and revenues from legalizing slot machines at racetracks would be necessary to pay for his still-unfinished "Plan for a New Pennsylvania."

"In listening to the governor's vision, I'm afraid it will require substantial tax increases, monumental borrowing and legislation of slot machines," said state Sen. Terry Punt, R-Franklin.

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He said the combination of those three things will not go over well with many legislators and employers in the state.

"It's a juggling act to develop a fiscally sound budget that doesn't mortgage Pennsylvania's future," he said.

The Democratic governor's stopgap budget would hold the line on major taxes, slash spending, tap one-time revenues and increase various fees to erase a $2.4 billion revenue shortfall and offset a 1.4 percent spending increase in the year that starts July 1.

Rendell promised the Republican-controlled legislature he would return on March 25 to outline his new initiatives.

"I hate this budget. I hate it with every fiber of my body," he said. "These painful cuts will do nothing but balance the budget. But this budget does nothing to change our future, nothing to change the conditions we find ourselves in at the present and it will doom us to repeat the past."

State Rep. Patrick Fleagle, R-Franklin, said he was surprised at how conservative Rendell's budget was.

"It almost looks like a conservative Republican budget," Fleagle said. "I think the initial budget is realistic in recession times."

Republican legislative leaders said they hoped to pass the first part of the budget promptly.

"We in the Republican Caucus are ready to move quickly and pass the budget he presented, knowing it is a balanced budget and cuts have to be made," Fleagle said.

He said there is no reason supplemental budgets can't be approved later if the economy improves and other funding is found for programs Rendell cut.

"I'd say it's a good start. Let's pass it and let's move on with it," he said.

Rendell acknowledged for the first time that he anticipates proposing a tax increase - he did not specify which tax - to finance the initiatives he will unveil later this month. He also reiterated his support for legalizing slot machines at racetracks to generate revenue. But he said the impact on revitalizing the state's economy, public schools and tax system outweigh the political fallout.

Fleagle said Rendell's second phase might be less palatable.

"I think that will be far more difficult to sell in Franklin County than this was," he said. "Slots will be real hard to sell to me personally and to most of my constituents."

Punt said he also was concerned about Rendell's next proposal, particularly how it affects slot machines.

"We need to look not at the revenue side, but at what the social side may mean. Will there be an increased crime rate? Will there be increased drug use and increased prostitution?" Punt said.

"I question how legitimate it is we should be basing our children's education on funding from gambling, and balancing our state budget on gambling," he said.

The budget calls for a $145 million assessment on nursing homes, the details of which officials said were being negotiated. It also would slow down the phasing out of the Capital Stock and Franchise Tax on businesses to save $53 million and increase unspecified license and other fees by $29 million.

The Associated Press contributed to this story.

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