The Condition of the PA Budget According to Rendell

Governor Rendell, in his mid-year budget briefing, provided an optimistic if not misleading outlook.

The Governor claims the commonwealth ended the 2008-09 fiscal year with a $354 million surplus. (Of course this was in October, after including $1.8 billion in one-time revenue sources like the entire Rainy Day fund. In June of 2009- the real end of the fiscal year- the state was $1.5 billion in the hole.)

This surplus together with the Governor’s estimated $450 million shortfall for fiscal year 2009-10 leaves the with state a $96 million deficit. To fill this gap Rendell has proposed:

• $100 million in freezes from discretionary grants
• $70 million in freezes to state departments from a 1% across-the-board cut to discretionary items
• $50 million in lapses from surplus program funds

After this Rendell estimates the General Fund will end 2009-10 with a $124 million surplus. Rendell also announced the budget projections rely on $250 million from table game revenues.

Our news release gives a more realistic view and explains the need for real spending reductions instead of accounting tricks.