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FOR IMMEDIATE RELEASE
May 6, 2009
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Orie Says Senate-Passed Budget Reflects, Responds to Tough Economic Times

The Senate today approved a fiscally responsible budget proposal for Fiscal Year 2009-10 and sent the bill to the House of Representatives for consideration, according to Senate Majority Whip Jane Orie (R-Allegheny).  Orie said the budget includes cuts in spending and no new taxes, reflecting and responding to the tough economic times that the Commonwealth is currently facing. 

"In austere times like this, we in state government must balance our budget just like working families do – by eliminating new spending, controlling current spending, and when necessary, cutting spending based on priorities," Orie said.  "This budget proposal contains short-term pain but if we tighten our belts, I think we will see long-term gain for our economy."    

Orie noted that state revenues came in nearly $1 billion below estimate in April, showing that Pennsylvania’s economy continues to be in a downturn.  Overall, Pennsylvania is facing a potential total shortfall of $2.9 billion or higher by the end of the current fiscal year on June 30. 

During a milder recession in the early 1990s, Pennsylvania experienced a similar catastrophic revenue shortfall when the Commonwealth amassed a billion dollar deficit and, in response, raised taxes by $3 billion. That response devastated the Commonwealth’s economic climate and reduced its competitiveness with other states. 

"One thing that has gotten us in trouble in the past is raising taxes during difficult times, Orie said. "Taxing ourselves to prosperity just doesn’t happen -- particularly on the backs of working families that cannot afford a new burden."   

No tax increases are required for the budget as proposed in SB 850 and it maintains the $750 million balance in the Rainy Day Fund. In his budget proposal, Governor Rendell called for draining down the Rainy Day Fund and imposing tax increases on natural gas extraction, cigarettes and other tobacco products, and retailers who collect the sales tax. 

Every spending cut recommended by Governor Rendell in his budget proposal is included in SB 850. However, additional cuts were necessary to bring this budget into balance.  

"The Legislature will be called on to share its burden of cuts as well – and we are committed to doing that.  The General Assembly’s operating line items are reduced by about 10 percent," Orie said.  "In addition, we are proposing that $100 million of the General Assembly’s reserves be redistributed into the General Fund." 

Orie noted that during hard economic times, the state still must fund core programs, particularly education. "While some groups criticize this budget for cutting education, the truth is that this budget – including state and federal stimulus dollars – would increase education funding," she said. "It is important to note that federal stimulus dollars are to be used for "sustaining" funding, not creating new programs."    

"What we are doing is what the governor should have done when he proposed his budget -- putting forth a budget that is within our means, supporting current programs the best we can, not expanding programs at a time when we cannot financially support them," Orie said. "This is a stable and secure position for the state until our revenues recover from the current economic situation."

CONTACT:

Mike Sarfert
(717) 787-6538