State Budgets: Pennsylvania Reduces Some Spending Growth But Banks on Federal Bailout

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.

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