Budget & Finance

Pennsylvania Enters Round 2 Of Budget Battle

By Catherine Gewertz — April 02, 2003 3 min read
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Edward G. Rendell rode into the Pennsylvania governor’s office this year on a key promise: The state would boost its share of school funding. Now, in a peculiar standoff with the Republican-controlled legislature, the Democrat has cut from his budget proposal the entire state subsidy for basic education.

Gov. Rendell blue-lined $4 billion from the fiscal 2004 education budget on March 20, capping a two-week period in which politics in Harrisburg, the state capital, devolved from unusual to downright weird. Cornered by swift Republican maneuvering, the governor chose to wield his only leverage: shredding a budget he himself had presented.

“It was the most unusual circumstance I’ve observed in 30 years of watching Pennsylvania politics,” said G. Terry Madonna, a political analyst and the director of the Center for Politics and Public Affairs at Millersville University, near Lancaster, Pa.

The fiscal 2004 budget process began March 4, when Gov. Rendell presented a budget that met the legal requirement of being balanced, but included enough painful cuts that he said he hated it “with every fiber of my body.”

He took the unorthodox step of splitting his $21 billion budget plan into two parts.

He offered lawmakers the basic budget, which level-funds K-12 education, by the mandated deadline of March 4, urging them to delay action on it until he returned March 25 with details of how he would pay for more school spending and also slash local property taxes, which have become an increasing burden for many residents.

But the strategy backfired. As the governor, a former mayor of Philadelphia, embarked on a tour of the state to promote his “Plan for a New Pennsylvania,” Republican legislators, lured by a spending plan with no new taxes, orchestrated passage of the budget by both houses in record time: eight days.

They used Mr. Rendell’s own exhortation—that Pennsylvania needs to live within its means—to portray the vote as the right step.

Falling mostly along party lines, the vote drew loud objections from Democrats. One representative grumbled to reporters after the House vote that it “makes Iraq look like a democracy.” Another called it a “runaway train.”

Mr. Rendell then found himself in the uncomfortable position of having to veto his own budget, sign a spending plan he abhorred, or use his line-item veto. He chose the third option, with a symbolic twist: he eliminated the basic-education subsidy, which represents all precollegiate state money in Pennsylvania.

The governor’s move was widely seen as a bid to regain negotiating clout that he would have lost had he signed the budget as passed.

The timing of his move also forces an extension of the debate about school funding, and the role property taxes should play in it.

On March 25, five days after he excised the school aid, Mr. Rendell presented his long-promised plan to hike school spending and cut property taxes. He proposed a property-tax reduction of 30 percent on average, and said he would restore the basic-education subsidy, and raise it 2.5 percent.

To finance his ideas, he would hike the personal income tax by nearly 1 percent, expand gambling, and impose taxes or fees on beer, moving-vehicle violations, and cellphone companies.

The governor’s presentation lobs the ball back into the legislature’s court, where it could make for politically delicate decisions, since the proposal links the property-tax cut and income-tax hike with education spending.

“The Republicans have the votes to vote down a tax increase, but if they do, they will take the blame for insufficient school funding,” said Susan B. Hansen, a political science professor at the University of Pittsburgh. “All the polls show [education] was the number-one issue for voters, so that would represent a big risk.”

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