July 13th, 2009

Last Monday, legislative leaders and the Administration held a twenty minute negotiation session, where Rendell issued $70 million more in cuts.  Even with these cuts Rendell and the Senate R’s remained $1.3 billion apart in their proposals.

Governor Rendell and House Democrats continued to remind everyone that even the Senate Republicans “bare-bones budget” is more than $1 billion out of balance, because it was passed before state revenues came in much less than expected in May and June.

Later in the week, House Republicans gleefully announced the Gov’s proposed personal income tax increase was dead, as House Democrats admitted they did not have enough votes to pass the broad-based increase.  The House Democrats then said they would give the Republicans exactly what they want and pass SB 850.   

The bill may then be passed onto the governor, who through a line-item veto can eliminate another $1.5 billion to put the bill in balance to create a stop-gap budget.  This means a supplemental appropriations bill would have to be negotiated later.

The other line of thinking is that Democrats will cut the $1.5 billion out of the budget bill to show how “draconian” the cuts will be, which will spur a public outcry.  This will force then force Senate Republicans back to the negotiation table.

Meanwhile, the House Republicans have posted their own amendment to SB 850.  SB 850 can be considered as early as today in the House Appropriations Committee.  However, unless the House rules are suspended it can not be considered on the floor until 14 days later on July 27.