Pennsylvania Governor Rendell Announces Latest Round of Cuts, Reduces Proposed Budget...

Pennsylvania Governor Rendell Announces Latest Round of Cuts, Reduces Proposed
Budget by Another $500 Million

HARRISBURG, Pa., June 26 /PRNewswire-USNewswire/ -- Governor Edward G. Rendell
today released a list of cuts totaling $500 million to his proposed 2009-10
fiscal year budget. Combined with more than $500 million in spending
eliminated during the current fiscal year, plus other reductions that he
previously announced to his projected budget, the Governor has now trimmed $2
billion from state spending during the current national economic downturn.

"Like so many of the cutbacks that we have made before, these reductions are
painful to me and I understand they will be painful to the people who benefit
from the affected programs. But the reductions are necessary," Governor
Rendell said. "I want Pennsylvanians to know that we continue trying to spread
the burden of balancing our budget as fairly and evenly as possible.

"This proposal cuts or completely eliminates nearly 80 percent of all General
Fund budget lines from their current level in the budget that was signed into
law last July. Twenty-six percent of all budget lines are completely
eliminated and of the remaining appropriations that we propose to fund, 70
percent will be reduced from their 2008-09 enacted budget levels," the
Governor said. "We cut further, accepted or partially accepted 53 percent of
the cuts that were proposed in Senate Bill 850."

Overall, 229 line items would be impacted by the latest round of spending
reductions. Compared to the current fiscal year, the Governor has now cut
three out of every four line items, totally eliminating 163 of them and
reducing another 328.

While making the cuts, the Governor preserved funding for K-12 education,
economic development programs that are crucial to helping the state pull out
of the recession, and key social safety net programs. He avoided actions that
could lead to higher property taxes at the local level, or the elimination of
services to the most vulnerable citizens of the state.

In addition to further across-the-board reductions to General Government
Operations lines for state agencies, the Governor also:
-- Eliminated all funding for Classrooms for the Future ($22 million);
-- Preserved funding for public colleges in the State System of Higher
Education, community colleges and the Thaddeus Stevens College of
Technology, but reduced by 13 percent, support for state related
universities -- Penn State, the University of Pittsburgh, Temple
University and Lincoln University;
-- Eliminated appropriations for museums throughout the state;
-- Reduced spending on Pennsylvania Higher Education Assistance Agency
grants to students by about $45 million and institutional assistance
grants to independent universities by more than $7.5 million;
-- Cut customized job training funds by $9 million;
-- Reduced the proposed level of funding for mental health services by
$8.5
million; and

-- Cut $7.5 million from the public library subsidy.

"I remain committed to adequate support for the programs that are an essential
investment in our future and that will improve our economy over the long
term," Governor Rendell said.

The Governor also announced that Pennsylvania will submit its federal stimulus
State Fiscal Stabilization Fund application today, prior to the June 30
deadline. Of Pennsylvania's total 2009-10 allocation of $953 million, the
application uses approximately 18 percent, as allowed by federal law, to
provide general budget relief ($173 million to help meet mandated correction
costs). The remainder is intended for education, and the state will dedicate:
-- $418 million for the second year of Pennsylvania's school funding
formula in order to keep local property taxes down;
-- $77 million to restore proposed cuts to the State System of Higher
Education, community colleges, and Thaddeus Stevens College of
Technology; and

-- $285 million in one-time grants to school districts to help districts
close their budget shortfalls and make one-time investments.

The federal application can be amended when the final state budget is enacted.

The Rendell administration is committed to creating a first-rate public
education system, protecting our most vulnerable citizens and continuing
economic investment to support our communities and businesses.To find out more
about Governor Rendell's initiatives and to sign up for his newsletter, visit:
www.governor.state.pa.us.

EDITOR'S NOTE: The list of additional cuts is available online at
www.budget.state.pa.us (in the "Current and Proposed Commonwealth Budgets"
section).

CONTACT:
Chuck Ardo
717-783-1116

SOURCE Pennsylvania Office of the Governor

Chuck Ardo of the Pennsylvania Office of the Governor, +1-717-783-1116