Gov. Rendell's budget

February 03, 2004

Pennsylvania Gov. Ed Rendell will present his $22.7 billion budget for fiscal 2004-05 to state lawmakers today.

The budget represents a 6 percent increase in state spending, but the more worrisome aspects would borrow $3 billion to protect the environment and stimulate the state's economy.

If those things are worth doing, the governor should make the case for paying for them now, instead of adding to the state's long-term debt.

Budget Secretary Michael Mascha told The Associated Press that the cost of borrowing such a large amount of money would require $37 million in interest payments the first year alone. In four years, that figure would double, Masch said.


The payoff for such an investment? Rendell has said that the $2 billion for economic development would make it possible to leverage $5 billion in private dollars, creating new jobs and, presumably, additional tax revenues.

The roughly $800,000 to $1 billion the governor seeks for environmental protection would finance an increased commitment to farmland preservation and the development of renewable energy sources.

Farmland preservation is a defensible expenditure because it prevents or forestalls the conversion of open space into residential developments, which seldom if ever generate enough tax money to cover the services - water, sewer and law enforcement - that they require.

Renewable energy development, however, seems like something the federal government should be doing to lessen the U.S. dependence on foreign oil.

The governor's budget also includes $1 billion that would be raised by the legalization of slot machines, cash that would go to reduce property taxes statewide.

To pass the bill, however, Rendell must deal with Republicans' demands that in exchange for new state money, local school boards' ability to raise property taxes above a certain level be subject to referendum.

The Pennsylvania School Boards Association opposes such an idea, perhaps because of its recent experience with elected officials who withheld state school aid during a political fight.

But if the school districts want more money, they must accept some conditions. And if the governor wants cash for economic development and the environment, he should make the case for raising the money now, as opposed to burdening future generations with the cost of repaying it.

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