State Budgets: Pennsylvania Reduces Some Spending Growth But Banks on Federal Bailout December 27, 2008 Joseph Bishop-Henchman Joseph Bishop-Henchman Gov. Ed Rendell (D) estimates that the current 2008-09 budget faces a $1.6 billion shortfall (out of $28.3 billion, a 4% increase over the previous budget). His 4-part plan to reduce the shortfall involves budgetary freezes, additional natural gas concessions, drawing down $375 million from the Rainy Day Fund (half of it), and an expectation of receiving $450 million as a federal bailout of state governments. Rendell has been one of the most vocal governors in pushing for a federal bailout. Even with these changes, the budget is still a 2.2% increase over the previous budget. More on Pennsylvania here. Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics Pennsylvania Tags State Tax and Spending Policy