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How will Pa. pay for its budget?

September 20, 2009|By JENNIFER FITCH

WAYNESBORO, PA. -- Perhaps the biggest question about Pennsylvania's $27.9 billion budget proposal is how the state will pay for it.

Gov. Ed Rendell and legislative leaders announced the agreement Friday in Harrisburg, Pa., but released few revenue details beyond the licensing of table games at casinos. An earlier budget plan anticipated table games would generate $200 million in revenue for the remainder of this fiscal year.

State Rep. Todd Rock, R-Franklin, said that estimate is unreasonable. He cited the opening of casinos after they were first permitted in 2004.

"It's been a disaster in the state so far," Rock said. "It's corrupt."

State Sen. Richard Alloway, R-Franklin/Adams/York, said he's glad the proposed budget does not have a broad-based tax increase.

"I am very thankful that we will not be taking more money out of the paycheck of every hardworking district resident as the governor had suggested," he said.

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Lately, the revenue plans are becoming known when special-interest groups send blast e-mails about their causes, state Rep. Rob Kauffman said. Someone from within the closed-door budget negotiations will tip off advocates, who send messages and in doing so, sometimes provide the first alert for rank-and-file members, he said.

Doctors learned about the potential raiding of Pennsylvania's Mcare fund, which provides compensation for medical negligence claims and provides an incentive to keep physicians in the state.

"They're very concerned about raiding the Mcare fund, and I'm equally concerned," Kauffman said.

Another potential new revenue source comes from the sales of merchandise needed for social clubs to offer small games of chance. Those include pull tabs and other tickets used in the games.

Kauffman said progress is being made in the capital to increase the weekly payout allowed for those clubs.

Sources say other potential revenue sources on the table include changes to the tobacco and business taxes.

Rendell, a Democrat, said the 2009-10 budget features $400 million less spending than that of 2008-09.

Rock shared concerns that spending will still greatly exceed revenue. The state developed a $3 billion deficit when revenue did not match 2008-09's spending level.

"We should be spending a lot less to narrow the gap," Rock said, saying he's heard there will be $1.2 billion in new taxes.

"I do not think that the governor's projections are accurate. ... Most members of the General Assembly expect to be dealing with future budgets long after Gov. Rendell is out of office, so there is no benefit for us to set lofty or unattainable revenue projections in this year's budget," Alloway said.

"They're probably using rosy revenue projections for this fiscal year," Kauffman said. "They play games with numbers all the time in Harrisburg."

All of Franklin County's legislators said they worry that depleting cash reserves will put the state in a poor budget position again in 2010-11.

"You're glad it's resolved, but it's kind of like, 'Here we go again,'" Rock said.

"There's nothing to draw off of next year if we find ourselves in the same situation. I'm not encouraged that this is going to be a good deal for Pennsylvania," Kauffman said.

Pennsylvania's budget is 80 days overdue. The legislators have not yet voted on the latest proposal.

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