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Few details on budget

| Tuesday, July 1, 2008

A proposed $28.2 billion state budget deal legislative leaders struck with Gov. Ed Rendell early Monday got mixed reviews from lawmakers awaiting details of the package.

Senate Republicans and Rendell administration officials released an outline of the agreement. The plan would boost basic education support to public schools by 3 percent and require borrowing about $2.8 billion to finance capital development, alternative energy and roads, dams, and water and sewer projects.

Some, like state Sen. Jane Orie, R-McCandless, welcomed the proposed budget. Others criticized debt levels, and still others complained that details of the package they will be asked to approve in several days are sketchy.

Orie said the budget's 3.8 percent spending increase is well below this year's 4.2 percent increase in the consumer price index. And she endorsed the plan to borrow $2.8 billion.

"The reality is, we are at a critical crossroads with regard to water, sewer, bridges, infrastructure. (Borrowing) will address things like the flooding we had in my district a while back," Orie said.

"These are long-lasting improvements. We're talking about dangerous bridges, water, sewers and dams. They are the kind of thing you're supposed to borrow money for."

But in the House, state Rep. Mike Turzai, R-McCandless, said he won't support the proposed $2.8 billion in new debt.

"We get the benefit today and hold off the tax increase until tomorrow. We're going to be paying it back with your kids' and grandkids' money," Turzai said.

State Rep. David Levdansky, D-Forward, chairman of the House Finance Committee, said there are no changes or amendments to the tax code, which means no new taxes. But Levdansky said few specifics were available.

"There are no print-outs, no language, no summaries, no talking points. ... We all have more questions than answers," Levdansky said.

"They had a handshake agreement, a verbal commitment," he said about the deal forged between legislative leaders and the Rendell administration. "Now, it's a matter of translating that into writing."

Preliminary information showed the state would issue bonds for:

- $800 million for dams and water and sewer facilities, backed by revenue from slot machine gambling;

- $500 million for alternative energy projects, backed by revenue from electric utility gross receipts tax revenue;

- $800 million for civic redevelopment projects, backed by general tax revenue;

- $350 million for repairs to about 400 of the state's most dangerous bridges, backed by motorist fees and taxes.

Voters would be asked to approve $400 million in bonds for water and sewer projects.

Jake Haulk, president of the Allegheny Institute, a conservative policy group in Castle Shannon, questioned borrowing money during an economic slowdown.

He said lawmakers should have looked for spending reductions, instead of borrowing to pay for new programs.

Orie said spreading debt obligations among different revenue sources, spreading borrowing over several years, and including taxpayer approval for $400 million of the debt showed a balanced approach to meeting state needs.

Although lawmakers are days away from voting on the final budget and missed the June 30 deadline for budget approval, the tentative agreement meant state workers do not face a furlough. Lawmakers could vote before July 4.

"There is reason to think we will finish on Thursday, although it might be a day or two past that," said Erik Arneson, communications and policy director for Senate Majority Leader Dominic Pileggi, R-Chester County.

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