Governor Rendell Calls for State Budget That Properly Funds Education, Plans for Future Fiscal Challenges

ALLENTOWN, Pa., March 6 /PRNewswire-USNewswire/ -- Pennsylvania's next state budget must adequately invest in education and prepare the commonwealth for the end of federal Recovery Act funding in 2011, Governor Edward G. Rendell said today during a visit to the Allentown School District in Lehigh County.

The Governor advised that the state will be in fiscal ruin if it doesn't prepare now for the end of federal stimulus funding and an immense spike in school and public employee pension contributions.  

"I have an obligation to the citizens of Pennsylvania and to the next Governor to ensure that our state is prepared to weather the economic storm that is coming once our stimulus funds go away and we have a bigger portion of the pension bill to pay," Governor Rendell said. "My budget sets forth a comprehensive plan that helps us get through this impending crisis while continuing our targeted investments to strengthen Pennsylvania's economic outlook."  

The Governor's proposal would set aside revenue generated by a sales tax change in a Stimulus Transition Reserve Fund that could not be touched until July 2011 – after Governor Rendell's term of office has ended - to help cover the estimated $2.4 billion budget gap that will result from the end of federal Recovery funding.

The Governor's plan will tax natural gas extraction and several currently exempt tobacco products, and also to lower the state's sales tax rate from 6 percent to 4 percent starting in September.

The Governor was joined by Allentown School District's superintendent, Dr. Karen Angello. She discussed how a failure by the General Assembly to adequately fund education would drive the need for additional local tax increases in her district.

The Governor noted that according to the General Assembly's own Costing-Out Report, the Allentown School District is being short-changed $5,944 per pupil compared to what is needed to provide a quality education. The school district is counting on the $3.1 million basic education funding increase proposed by the Governor to sustain proven academic programs that lead to student success.  

"If we do not adopt a budget that continues educational investments and plans for the future, Allentown School District will have to make-up the shortfall by raising local property in 2010-11 taxes by $3.1 million -- or nearly five percent," the Governor added. "Looking ahead to 2012-13, failing to act would mean Allentown School District would have to raise taxes a total of 40 percent. This means the Allentown School District will have to look at cutting programs and staff in addition to saddling homeowners with exorbitant spikes in their property taxes.

"While facing this extraordinarily difficult budget situation, we need to keep the promise to our students that we will provide adequate resources to their schools in order for them to succeed," Governor Rendell said. "Additionally, we need to work together to find a solution for the financial storm that is brewing so that we aren't left scrambling when it hits."

For details of Governor Rendell's budget proposals, visit www.pa.gov. For specific information on the proposed education budget, visit www.education.state.pa.us.  

Media contacts:

Leah Harris, Department of Education; 717-783-9802

Gary Tuma, Governor's Office; 717-783-1116

SOURCE Pennsylvania Office of the Governor