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State budget impasse threatens government-funded social services

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Friday, Oct. 2, 2009

HARRISBURG — A two-week-old state budget deal among legislative leaders and Gov. Ed Rendell fell apart Thursday as Pennsylvania reaches the 94th day of an impasse that threatens government-funded social services.

"It is unconscionable that both sides cannot seem to find middle ground in order to pass a new budget," Grant Oliphant, president and CEO of The Pittsburgh Foundation, said yesterday. "Increasing numbers of families and individuals depend on social- and human-services support for their very survival, and I am deeply worried that it is going to take a tragedy to bring our state leaders to a compromise."

The Pittsburgh Foundation yesterday granted more money to a fund established to help people hurt by the recession — raising the emergency grants to more than $1 million.

The House today is expected to vote on a tax package, approved by the Rules Committee last night, that would make significant departures from the deal Sept. 18 among House and Senate Democrats, Senate Republicans and Rendell.

"If the House passes this revenue package, we are back to square one with budget negotiations," said Senate Republican spokesman Erik Arneson.

The House plan would remove a 20 percent tax on small games of chance; eliminate a plan to levy the sales tax on theater, music, dance and museum admissions; impose a new tax on natural-gas extraction; and propose a 30 percent tax on retailers for their purchases of cigars and smokeless tobacco.

Pennsylvania is the only state without an excise tax on snuff and is one of two states without a tax on cigars.

It's also the only state without a budget.

The House plan would impose a 34 percent state tax on table games, once they are legalized — the same rate as slot-machine gambling.

The House wants to charge $20 million for a table-games license. A Senate bill calls for a 12 percent tax rate and a $10 million license fee.

"We stood firm against Big Tobacco. We stood firm against casinos," said Rep. Robert Belfanti, D-Northumberland.

House Majority Leader Todd Eachus, D-Luzerne County, said he had no choice but to change the deal. His members said they opposed the arts tax and the small-games tax.

"If it (the compromise) can't pass the House with 102 votes, it's not even real," Eachus said, noting the deal would preserve some key elements of the three-caucus deal with Rendell.

"We tried as close as we could to conform to that deal," Eachus said.

Meanwhile, Rendell yesterday urged all lawmakers to remain in Harrisburg until a final budget wins approval — even if that increases the taxpayers' tab for their stay. It would result in more $158 per diems for lawmakers' food and lodging costs, which totaled $532,000 in July and August, records show.

Rendell said House Democratic leaders have agreed to keep House members in Harrisburg. Senate President Pro Tempore Joe Scarnati, R-Jefferson County, said the Senate would stay if there's the prospect of a budget vote.

In a letter to legislative leaders, Rendell wrote: "We must act swiftly because our counties, local governments, early-childhood centers, health care institutions, environmental protection organizations, school districts, and colleges and universities are depending on us to get this budget enacted, and count on state funding to enable them to provide necessary help and aid to the citizens of the commonwealth."

In early August, the governor vetoed $12 billion in money for nonprofits, day care, pre-K programs and schools, in order to gain what he described as "leverage" over lawmakers in the budget debate.

A $3.2 billion deficit is driving the impasse.

A recent increase in poverty rates in metropolitan Pittsburgh, along with higher unemployment and more demand for emergency aid, is a lingering impact of the recession, said Oliphant of The Pittsburgh Foundation.

"On top of this unprecedented hardship, we have a (budget) crisis that is placing further, huge strain on our human-services infrastructure, endangering support for the most vulnerable in our community," said Diana Bucco, president of The Forbes Funds, an affiliate of The Pittsburgh Foundation.

"I am amazed that more nonprofits have not been forced to close by now, due to the absence of state funding."

At a glance

An emergency fund established to help people hurt by the recession granted money Thursday to five organizations — raising the fund's emergency grants to more than $1 million.

The five nonprofits will share $214,500, according to Neighbor-Aid, established in December by The Pittsburgh Foundation:

The Salvation Army — $100,000 to provide basic support to families and individuals, including groceries, rent assistance, furniture, utilities, clothing, medical care, child care, counseling and transportation.

Just Harvest Education Fund — $25,000 to help people apply for food stamps and find ways to improve the application process.

Crisis Center North — $16,000 to support case-management services and provide money to those in need.

Urban League of Greater Pittsburgh — $20,000 to provide emergency food assistance to families.

Society of St. Vincent De Paul — $53,500 to provide energy-efficient appliances to low-income families and individuals.

The foundation created Neighbor-Aid to support nonprofits that provide housing, food, utilities, transportation and child-care assistance.

Partners include the United Way of Allegheny County, civic leader Elsie Hillman and foundations working with the Allegheny County Department of Human Services.

Additional Information:


To contribute, contact The Pittsburgh Foundation or United Way of Allegheny County. For information, go online .




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