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July 7, 2009
HARRISBURG, PA - As many as 800 Pennsylvania state employees may have to be laid off because of Republican lawmakers' demands for spending cuts and labor unions' refusal to accept less drastic measures, Gov. Ed Rendell said Tuesday.
"I regret that deeply," Rendell said. "I wish the unions would consider letting me do rolling furloughs. I think it's a fairer way than taking away someone's livelihood, but I can't do that without their assent under the contract."
David Fillman, the executive director of the state's largest employee union, said unions have ruled out furloughs because it involves office shutdowns that are disruptive to government. But Fillman also said he hopes Rendell's cabinet secretaries are able to avoid layoffs by finding ways to save the money.
"I have not seen a mandate that there has to be 800 people leaving," said Fillman, who heads Council 13 of the American Federation of State, County and Municipal Employees. "So we're hoping the secretaries will use a more surgical cut."
Amid partisan standoff that has left the state government without a budget for a week, Rendell also said he plans to ask the largest vendors to continue providing services while the state is barred legally from spending money to pay most of its bills. They would be paid in full once a budget is approved, he said.
So far, state government operations are continuing, but no agreement between the Democratic governor and the Republican-controlled Senate is in sight, even as Rendell said he believes the sides can close the state's multibillion-dollar budget deficit by another $200 million or so.
As he looks for more places to cut spending, layoffs appear inevitable, Rendell said. Pink slips would go out when the budget is passed, or perhaps even sooner, he said.
The latest cuts include trimming the Legislature's budget, development incentives for private companies that agree to expand in Pennsylvania and workers from human services programs, Rendell said. Laying off 800 workers will save state government less than $25 million, Rendell said.
Rendell has proposed a $28.8 billion spending plan that would require tax increases, including a 16.3 percent boost in the personal income tax.
Senate GOP leaders oppose any tax increase, and have put forward a $27.3 billion spending plan. However, the state's revenue projections have eroded dramatically in recent weeks and Senate GOP leaders have not said how they would make up the $1 billion-plus gap it tore in their budget.
Rendell said he does not believe much more cutting in state spending is possible beyond the approximately $200 million, and he vowed again Tuesday to defend a 7 percent increase for instruction and operations in public schools.
"I'm not inclined to rip asunder the education budget for the state and force local school districts to raise property taxes significantly," Rendell said.
With some officials saying a budget agreement will not happen before Aug. 1, it is unclear how long state government can continue operating on the good will of its vendors.
Rendell acknowledged Tuesday he does not know either, but he said he plans to write a letter to the state's vendors and remind them that the state will pay as soon as a budget passes.
He also pointed out that state contracts include a provision that allows the state to end the agreement at any time, but declined to say whether that was an implied threat to terminate vendors that cut off service.
"We're about as good a customer as you can have these days and I hope they'll hang with us," Rendell said. "I won't mention in my letter that we have the right to terminate, but I'm looking for loyalty."
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