The Pittsburgh Post-Gazette is reporting today that Pennsylvania's fiscal picture has significantly worsened, with the General Fund budget deficit now projected to reach $2.3 billion by June 30.
Gov. Ed Rendell announced at a press conference that continuing job losses and other bad economic news from the ongoing recession have reduced state revenues such as personal income taxes and sales taxes, according to reporter Tom Barnes.
The budget deficit has been a moving target since Rendell first acknowledge last fall that the state's budget was in the red.
Rendell's previous estimates that the deficit would reach $1.6 billion was replaced by another guess that it could top $1.9 billion, Barnes reports.
Rendell now says the deficit will reach at least $2.3 billion, according to Barnes, who says Rendell disclosed two additional steps to erase the added $700 million in deficit.
The first is a handout from the federal government to cover the state's out-of-control Medicaid spending.
Rendell anticipates the state's allocation of federal aid for Medicaid to be more than the previous $900 million over two years -- perhaps as much as $2 billion to $4 billion over a three-year period, Barnes writes.
Secondly, Rendell wants the Legislature to give back $175 million of its current $200 million "budget reserve" that it has been hording in recent years, Barnes say.
Rendell may also propose layoffs or unpaid furloughs for state workers in fiscal 2009-10, which starts July 1, according to Barnes.
Don't you think Rendell wishes he had some of that $8 billion he squandered over the past eight years? That would cover the state's deficit and then some. Can we lay off Ed Rendell for the last two years of his term? And sending the Legislature home would save taxpayers $300 million a year. Anybody have a better idea?
Read the full article at the newspaper's Web site.