Pennsylvania Budget Deal Ends 80-Day Impasse

[steven johnson]

Source: Associated Press

HARRISBURG, Pa. (AP) -- Gov. Ed Rendell and legislative leaders reached a budget deal Friday that would end Pennsylvania's distinction as the last state still fighting over its annual spending plan.

Details about the agreement were not immediately available, but the Democratic governor and legislative leaders scheduled an 8 p.m. news conference to discuss the breakthrough.

Erik Arneson, a spokesman for the Senate Republicans, confirmed the deal, as did a Rendell official speaking on condition of anonymity in advance of the formal announcement.

Negotiators struggled all summer to resolve a partisan dispute over whether to fill the state's multibillion-dollar budget hole with new or higher taxes, cuts in state programs or a combination of the two.



Read more: http://www.nytimes.com/aponline/2009/09/18/us/AP-US-XGR-Pennsylvania-Budget.html?_r=1

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A budget compromise has been reached after a 2 1/2 month standoff after a rumor that lawmakers might be considering expanding the definition of cigarettes to include small cigars sometimes referred to as cigarillos that are not currently taxed by the state. This presumably would bridge the $100 to $200 million gap to balance the budget.

[Missy Vixen]

1. Let's hope Philly can keep the libraries open as a result

:woohoo:

[BumRushDaShow]

2. The libraries were already saved by an earlier deal yesterday. n/t

[Moosepoop]

3. Thanks for that info.

I had seen the thread on the libraries possibly having to close, but had missed anything having to do with that being resolved. Great news!

[BumRushDaShow]

5. Yeah, I stuck a mention somewhere near the bottom of that thread last night

but I expect it got missed!

The state legislature enacted a separate bill that allows Philly to increase its sales tax by 1% to a total of 8% (= 6% state sales tax + the current 1% city sales tax + this new 1%) and allows for deferred payments to the city's pension fund for a few years. Sadly the latter kicks things down the road, at which point there will be a big need to make up for the lost money into the pension fund. The hope is that the economy will improve in a few years and the money can be replenished. The sales tax increase is supposed to sunset after x number of years.

IMHO, they should have allowed the city to raise the wage tax back up to where it was a decade ago - at least temporarily.

[Moosepoop]

7. Wow, I hope it all works out OK in the end...

for the libraries, and the pensioners!

[hay rick]

9. Philadelphia's pension system.

I always get a queasy feeling when I read about a new plan to defer pension contributions, so I googled and came up with this link: http://www.pewtrusts.org/news_room_detail.aspx?id=34146

Report (from Pew Charitable Trusts) released on 1/23/2008 shows Philadelphia's pension system only 52% funded at that time. Dow spent most of 2007 over 12,000 and it's under 10,000 now. Unless there's been a big cash infusion in the interim it sounds like they're just giving up all pretense of pension funding.

[BumRushDaShow]

11. Thanks for the link!

I had seen similar studies done but at the state level.

[Libertas1776]

4. So the libraries

are going to stay open? I had a feeling it was just some see who blinks first political brinkmanship malarkey. Despite how crappy our country may be getting, we are still far from the point of actually letting an entire metropolitan area's public library system go belly up.

[BumRushDaShow]

6. Yes, all 54 libraries will remain open.

http://www.kyw1060.com/Librarians--Library-Users-United-in-Relief-Over-Ph/5249758

[Libertas1776]

8. Excellent!

:bounce:

[ArbustoBuster]

12. Heck, it was worse than just the libraries.

The Mayor was proposing defunding the court system. Mind you, part of this is because there's a legal ruling that the state should be paying for the courts, not the city...and the state has been ignoring that ruling for years. But, still, we were at the point where a major city's courts were going to have a budget of zero.

[Odin2005]

10. They saved the libraries? GOOD!