Rendell Threatens Veto of Budget Compromise

The House Democrats and Senate Republicans have come up with a compromise $27.9 billion dollar budget that Pennsylvania Governor Ed Rendell says he will veto if it's passed. The new plan spends about $300 million less than last year's budget but includes no increase in the personal income tax or sales tax. The proposal does include a 25 cent per pack increase in the state cigarette tax; delaying the phase out of the Capital Stock and Franchise tax by keeping the rate at 2.89 mills for 2009through 2011, the same rate as 2008; and,$200 million anticipated in 2009-10 from the addition of table games in casinos. However, table games have not been approved.
The spending proposal also taps $755 million from the state's Rainy Day Fund.

But Governor Rendell said the budget plan is unacceptable and would be "ruinous to the people of Pennsylvania." Rendell claims the House Democrats/Senate Republicans plan actually cuts 350 million dollars from education spending and would remove 6,000 kids from CHIP (Children's Health Insurance Program). Rendell says he told lawmakers all along that any proposal would have to generate enough revenues to balance a budget this year and next. Rendell says this budget is out of balance and next year's would be $1 billion in the red due to faulty revenue projections.
Rendell says he's not embarrassed that a budget is more than 10 weeks late and Pennsylvania the last state without a budget.
"No, it would be an embarrassment to pass a budget that next year will produce a billion dollar deficit. I won't do that to the people of Pennsylvania."