Rendell says GOP ignoring shortfall

Ed Mahon

BELLEFONTE — In the state’s eighth day without a budget, Gov. Ed Rendell brought the debate to Bellefonte Area High School’s lobby, where officials are banking on his success.

For the CDT/Eric Smith

Governor Ed Rendell walks answers questions from the media outside Bellefonte High School on Thursday. Rendell spoke to educators, concerned taxpayers, supporters and union representatives about the state budget and taxes in the school lobby. For the CDT/Eric Smith

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Bellefonte, like three other districts in the county, passed a final budget and set a tax rate assuming that the 2009-2010 state fiscal budget would be closer to the governor’s proposed version than the Republicans’.

In front of an audience of about 125 people on Thursday, Rendell argued that if the state doesn’t raise its taxes to close a projected $3.2 billion shortfall, local school districts will have to cut services or raise property taxes.

He said his proposal to increase the personal income tax from 3.07 to 3.57 would be fairer to the unemployed and senior citizens, whose Social Security and retirement incomes are exempt, and would more equitably distribute funding to schools, he said.

“Education should not depend on the zip codes (students) go to,” Rendell said.

He rejected a charge by Republican Sen. Jake Corman last week that Rendell wants the budget impasse to go past July 17, the last day most state workers will receive paychecks.

“He’s wrong. If everyone comes to their senses, we can do it tonight,” Rendell said, adding, “...But they’ve got to recognize that there’s no way to do this without raising revenue. They’ve got to recognize and have some guts. People are not dumb; people understand.”

Rendell said it’s unrealistic to pass a budget without a tax increase because the Republican’s proposal would still fall short of closing the deficit by about $1.5 billion. Senate Republicans approved a budget with no tax increases in May, but the state’s projected revenues have since declined.

Since June, Rendell has been making similar stops at school districts across the state. Thursday’s trip brought him to the home district of Corman, who chairs the Senate Appropriations Committee and has been a lead backer of Senate Bill 850.

The Republican bill calls for the state’s basic education subsidies to remain flat at 2008-09 levels. But school districts would receive an increase in funding, thanks to federal stimulus money.

Bellefonte, for instance, would receive $10.23 million in total state and federal funding, compared with $9.36 million in 2008-09, a 9.2 percent increase.

“In a year like this, that’s pretty good,” Corman said. He said that he’s willing to accept a final budget that includes no broad-based tax increases, spends less than the 2008-09 budget, and makes it possible to balance future budgets.

However, the stimulus money the districts would receive under the Republican proposal is targeted to specific programs, such as special education and programs for low-income students.

Districts would also receive considerable more under the governor’s version.

Bellefonte would receive a basic education subsidy increase of $434,053, which is the most flexible funding source. Counting charter school reimbursements, money for science programs and other targeted funding sources, the Department of Education figures that Bellefonte would receive $840,027 more under the governor’s proposal.

If the district receives less than Rendell is proposing, it could close the gap by dipping into a $2 million reserve set aside for construction projects, cutting funding, or a combination of the two, said Bellefonte’s fiscal affairs director, Ken Bean.

Penns Valley Area School District is the only one in the county that passed a budget that aligned with the Republicans’ proposed budget. The district cut costs by laying off four full-time and three part-time employees.

Audience members included educators from surrounding school districts and state employees pushing for a budget resolution so they wouldn’t be working without pay later this month.

About 20 protesters greeted Rendell at the entrance to the high school, chanting “No tax hike.”

“Raising our taxes during a recession, to me, is insanity,” said Wendy Brown, of State College, who held a sign saying “No tax hike!” on one side and “Cut your waste” on the other.

Brown and her fellow protesters weren’t swayed by Rendell’s speech.

“We’re in hard economic times. There are layoffs all over the place,” said Peter Trippett, of Lemont. “Right now, however, there are a lot more layoffs taking place in corporations and in industry.”

Ed Mahon can be reached at 231-4619.