Senate Bill (SB) 850 proposes spending $24.6 billion in state general fund dollars in FY2009-10, effectively reducing state expenditures to 2005-06 levels. With the addition of $2.7 billion in federal stimulus funds, total state spending rises to $27.3 billion, $1.7 billion less than the spending plan proposed by Governor Ed Rendell in February.
Even with federal stimulus funds accounted for, every major department will be cut. Funding for the Department of Public Welfare will decline by $250 million, a 4% cut, while funding for environmental protection will decline by 40%.
The Senate plan relies on cuts to balance the budget, rejecting other options. The plan leaves the state’s $740 million Rainy Day Fund untouched and contains little new revenue. It rejects the Governor’s proposed tax on smokeless tobacco and other tobacco products, a new natural gas severance tax, and a cigarette tax rate increase. It leaves $500 million in the Health Care Provider Retention Account, a portion of which could be used to avoid service cuts.