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For Immediate Release
February 4, 2009
Contact: Sally Kohr
(717) 787-4651

Senator Alloway: Senate Republicans Will Examine Proposed Spending, Cuts in Budget Proposal

HARRISBURG -- Senator Richard Alloway II (R-33) said that Senate Republicans will carefully study the $28.9 billion general fund budget for Fiscal Year 2009-10 unveiled by Governor Rendell today.

The governor's proposal includes a $1.26 billion (4.6 percent) increase in spending.

"With state revenues continuing to decline, our first priority must be getting our spending priorities straight," Alloway said. "This is only the first step in the process, and I am hopeful that we will be able to move forward from this budget proposal to create a fiscally responsible spending plan that will continue to meet the needs of the communities I represent."

With January's revenues collections at $261.7 million below projections for the month, year-to-date revenues stand at $13.3 billion with a cumulative collections shortfall of about $1.08 billion (7.5 percent). The governor is now projecting a $2.3 billion shortfall, and that is just over 8 percent of the total revenues that Pennsylvania had expected to take in during the current fiscal year.

The budget proposal anticipates additional revenues from: 

• A 10 cent-per-pack increase in Pennsylvania's cigarette tax, to a proposed total of $1.45 per-pack.
• A new tax on cigars and smokeless tobacco.
• A new tax on extraction from the state's Marcellus shale natural gas reserves.
• A proposal to use $250 million from the Rainy Day Fund in Fiscal Year 2008-09 and $375 million in Fiscal Year 2009-10.
• No reduction in the Corporate Stock and Franchise Tax rate.
• Revenues generated from video poker machines in establishments holding liquor licenses.
• Anticipation of $2.4 billion in federal relief funding.
• Fees on municipalities that use the State Police as their primary police force.

The proposed budget includes the elimination of 101 line items and reductions in 346 other line items, including the elimination of funding for the Scotland School for Veterans Children in Franklin County. Senator Alloway pledged to closely examine the effects of closing the school, including the impact on the community, the employees and the approximately 257 students who had expected to return to the school in the fall.

Funding for the Scranton School for the Deaf, New Choices/New Options program, and the Civil Air Patrol has also been eliminated.

The budget proposal included $42.5 million for rail and aviation improvement projects. Alloway supported the governor's call to invest in rail freight infrastructure as a way to create jobs for Pennsylvanians.

Several grant programs, municipal and community assistance services are proposed for elimination as part of $216.7 million in reductions in the Department of Community and Economic Development budget.

The proposed budget includes a $300 million (5.4 percent) increase in Basic Education Subsidies for Pennsylvania's public schools for a proposed total of $5.86 billion. Special Education funding would remain at the current level of $1.02 billion.  

Funding for State System of Higher Education universities would also remain at its current level of $498.5 million. Community colleges would see a $5 million (2 percent) increase for a total of $241.2 million. State-related universities are facing a 6 percent reduction in funding and state-aided schools face a 10 percent decrease in funding.

The Senate's review of the budget will formally begin on February 23 with two weeks of hearings conducted by the Senate Appropriations Committee. The state's current fiscal year ends on June 30.