Pennsylvania shutdown ends as Rendell, Legislature reach accord 

Pennsylvania Governor Edward Rendell and the Republican-controlled Senate reached an agreement last night on a $27.3 billion state budget, ending a partial state shutdown that idled 25,000 government employees.

Speaking after 11 p.m. local time, the second-term Democrat said he and Republicans agreed on a deal that left intact the budget outline he presented in February. Rendell spokesman Chuck Ardo said Rendell agreed to forgo a planned annual surcharge on energy bills to fund clean energy programs that became the main sticking point and said he would seek another source of money for the project.

Rendell said the worker furloughs will be rescinded effective 12:01 a.m. today.

“We have a budget agreement,” Rendell told reporters in televised remarks from the state capitol in Harrisburg. “There has to be some give and take. There have to be some victories on both sides and some goals that are not achieved.”

Rendell said in a statement the agreement includes funding increases for education and health care, as well as $950 million to fund highway and bridge work for 15 to 20 years. Erik Arneson, spokesman for Senate Majority Leader Domini Pileggi, a Republican from suburban Philadelphia, said the money would come from Rendell’s plan to place tolls on Interstate 80 and raise existing ones on the Pennsylvania Turnpike.

“From our perspective this is an excellent agreement,” Arneson said. “The governor proposed seven new taxes in his budget address and this agreement has none.”

Deadlocked

The budget became deadlocked after Republicans insisted on passing it before they would consider the energy fee, along with Rendell’s proposal for a statewide smoking ban, new mass transit and road funding and borrowing for a Pittsburgh hockey arena. It was unclear when the plan would be voted on in the Legislature.

The second-term governor said he was forced to order the unprecedented partial government shutdown because without a budget the state had no authority to pay its workers. The action took effect at 12:01 a.m. yesterday, sidelining road crews, closing state parks, and halting the issuance of permits by transportation and environmental protection agencies.

The state has been without a budget since the fiscal year began July 1. The budget as proposed by Rendell would increase spending by $947 million, or 3.6 percent, from the previous fiscal year. The new assessment on electric bills to fund alternative energy sources such as wind power would have cost the average household $5.40 annually, Ardo said.

The state’s House of Representatives, controlled by Democrats, approved a budget bill in May.

Some 52,000 workers with the state police, corrections department workers and parole agents are classified as essential and continued to work during the shutdown. The state’s five casinos also remained open after a judge issued a temporary restraining order July 8 halting their closure, Secretary of Revenue Thomas Wolf said in a statement. The slot machine casinos pay about $1.7 million a day in taxes, said Richard McGarvey, a spokesman for the state gaming control board.

By Terrence Dopp

Bloomberg

10 July 2007