Rendell forecasts broad fiscal cuts
By Mario F. Cattabiani and Amy Worden
Inquirer Harrisburg Bureau
HARRISBURG - With Pennsylvania facing a $400 million fiscal shortfall, Gov. Rendell said yesterday that his forthcoming budget proposal would contain widespread cuts, including some services for the state's neediest, but that no new taxes were planned. At two public events yesterday, Rendell confirmed that in his budget address next Wednesday he would recommend cuts to the state's Medical Assistance Program, which provides health care to 1.7 million low-income residents.
The governor would not discuss details of the cuts, calling them "a restructuring of benefits" that he hoped would prevent anyone from losing medical coverage.
"The federal government is cutting Medicaid funding... . We are wrestling with the ramifications of that," Rendell said. "I'm trying very, very hard to make sure no one loses medical coverage in Pennsylvania."
Rendell said deep cuts in federal health-care reimbursements have left a $400 million hole in the state's Medical Assistance Program and forced his hand on the budget, as has happened to other governors.
"Every state in the nation is facing horrible, heart-wrenching choices," Rendell said. Speaking in broad terms about his budget proposal, Rendell said, "There are going to be cuts pretty much across the board."
News of the medical cuts comes despite slightly higher than expected revenue from an improving state economy. Rendell's first two budgets contained ambitious spending plans, specifically targeting education and economic development, funded through an income-tax hike and bond issues.
Now the fiscal reality check has arrived from Washington.
Gone are the one-time funding sources that had helped Rendell's earlier budgets, including $900 million in emergency aid that was part of President Bush's 2003 tax-cut plan.
At the same time, the demand for programs that assist low-income residents, including Medicaid and Temporary Assistance to Needy Families, has increased. The state Department of Public Welfare reports double-digit increases in the number of residents seeking some form of assistance, while at the same time health-care costs are rising at a similar rate.
"This is going to be a tough budget," Rendell said. He promised, though, that the new, $200 million early childhood education block-grant program would not be cut.
Rendell stressed that his spending plan would be upbeat and contain "a lot more hope than downside."
The governor has not revealed specifics of his fiscal blueprint so as to not steal his thunder when he addresses the joint session of the General Assembly next week.
If details leaked out before then, he could "stay in Jacksonville and mail this baby in," Rendell joked to a roomful of newspaper editors and publishers yesterday in Harrisburg. Rendell, a longtime Eagles fan, plans to attend Sunday's Super Bowl in his ongoing role as a commentator for Comcast SportsNet.
In a wide-ranging question-and-answer session at the Pennsylvania Newspaper Association's annual conference, Rendell promised to sign a bill requiring lobbyists to disclose how they spend money to influence legislation. If a bill does not come this term, Rendell said he would sign an executive order imposing lobbyist disclosure rules on executive offices.
The state is without a blanket disclosure law, and only the Senate requires lobbyists to say how much they spend and for what purpose. The governor also chastised the state House for approving a new rule on Monday that allows members to vote on bills even if they are not in the Capitol at the time.
"It's bad," Rendell said, calling the so-called ghost-voting provision "perplexing to me." When asked whether his budget proposal would contain no new taxes, Rendell would not bite. "You never know," he said. He later quipped that he was considering raising taxes on newsprint.
Kate Philips, the governor's press secretary, called the comments a throwaway line and said the governor is sticking to previous announcements that the budget, though challenging, would not call for any tax hikes.