More Cuts on the Way

Gov. Edward Rendell last week announced $128 million of additional broad-based spending reductions from the current fiscal 2009 budget, which began July 1. Pennsylvania’s revenues to date are $658 million, or 6.8%, below projections.

The governor also urged the General Assembly to reduce its spending by 4.25%, which would generate $36 million of savings. Along with program reductions, Rendell said he would freeze wages for more than 13,600 non-union employees, saving $14.3 million through June 30. In addition, he announced he would donate back his 2.8% mandated cost-of-living increase, after state and federal taxes, and directed 51 cabinet and executive officials to also follow suit.

This is Rendell’s second round of budget cuts to the current fiscal plan. In October, he called for $350 million of spending reductions, along with a hiring freeze and other savings initiatives.

“We don’t have a crystal ball, we don’t know what the rest of the fiscal year will bring,” Rendell said. “We anticipate there will be further shortfalls. We don’t know where they will wind up, but we have to be prepared for any contingency that happens.” 

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