Spending Cuts & Layoffs Expected in PA

Pennsylvania’s budget deficit has expanded to more than a billion dollars. Governor Ed Rendell says that means another round of state employee layoffs.
April tax collections came in nearly 400 million dollars below projections, increasing the state’s revenue shortfall to 1.1 billion dollars.
Senate Appropriations Committee Chairman Jake Corman, a Centre County Republican, says he expects the figure to reach 1.3 billion dollars by the end of June.
Governor Rendell agrees with Corman on the fact more budget cuts will now be needed.

"And there is some area to be cut, but not much. That means further cuts and reductions in spending will have to come from layoffs and furloughs."

Corman says the shortfall makes Governor Rendell’s February budget proposal obsolete.

"We really need to start over, start from scratch, and figure out a way to put this budget together on time before June 30th, that reflects the revenues we have, as opposed to what was reflected back in February."

Rendell agrees he needs to trim his proposed 29-billion dollar budget.
Corman says all four legislative caucuses are against a broad-based tax increase, but Rendell says the state needs to bring in new revenue.
He wants the General Assembly to pass taxes on natural gas drilling, cigars, and smokeless tobacco. In February, Rendell proposed setting those tax proceeds aside in a special fund. He now says some of that revenue would be needed in next year’s budget.