Rendell Announces Budgetary Reserve Plan; Urges Leaders to Follow His Lead

Harrisburg – Governor Edward G. Rendell today announced a plan to put $212 million into budgetary reserve because Pennsylvania did not receive as much federal funding as it had anticipated when the state budget was finalized in July.

The Governor also wrote to legislative leaders, the chief justice of the state Supreme Court and the heads of independent state agencies and row offices, asking them to follow his lead by putting 1.9 percent of their funding into reserve.

Governor Rendell said that in spite of the budget cuts, the state’s basic education subsidy to school districts will still increase by $200 million -- $50 million less than originally planned when the budget was enacted.

With these cuts –$50 million in education and 1.9 percent across the board– state expenditures will be reduced by $212 million, the Governor added.

The Governor said his budget-balancing effort assumes that legislators will live up to their commitment to enact a severance tax on natural gas extraction no later than Oct. 1.

The $70 million generated by that tax, when combined with the Governor’s $212 million in spending cuts, will help to close a total $282 million general fund gap.