The state's precarious fiscal situation is getting worse -- much worse, the chairman of the House Appropriations Committee said yesterday.

Rep. Dwight Evans D-Philadelphia, said the revenue shortfall for the current fiscal year, which ends June 30, is now projected to be "at least $3 billion."

That's $700 million more than the $2.3 billion that Gov. Ed Rendell forecast three months ago, and $400 million higher than some legislators forecast just a month ago.

"The numbers are staggering," Mr. Evans said. "We have a lot of work to do. Do we need to make decisions that are painful? Absolutely."

The state's original spending plan for fiscal 2008-09 was $28.26 billion, but that is being trimmed by more than half a billion dollars. The state Revenue Department is due to release the state's April revenue collections today.

"Given the national economic indicators, the [Pennsylvania revenue] numbers could be grim," said Rendell aide Chuck Ardo.

A state representative from Philadelphia is introducing a bill to permit the use of medical marijuana in Pennsylvania under certain restrictions.

Democratic Rep. Mark Cohen said people in pain should not be forced to choose between moving out of state for treatment or buying drugs from criminals.

The bill has only six co-sponsors, but Cohen said he's optimistic about its prospects because polls show high levels of public support and lawmakers have to respond to their constituents.

The state Liquor Control Board didn't break the law but showed impaired judgment and ignored red flags when it awarded a $173,820 contract to a regional director's spouse, Auditor General Jack Wagner said Wednesday.

The liquor board last month referred the matter to Wagner after newspapers revealed it awarded a contract to Solutions 21, a Pittsburgh firm whose president, John "Buddy" Hobart, is married to the board's western regional director, Susanne Hobart.

Liquor board Chairman P.J. Stapleton III said he is pleased Wagner's review concluded no laws were broken. The board said Solutions 21 submitted the lowest proposal to provide courtesy training to state store clerks.

Wagner said he found no evidence Susanne Hobart funneled confidential information to Solutions 21 or influenced the process. But he said the liquor board ignored red flags and exercised poor judgment.

The Legislature went too far in barring casino owners and executives from making any political campaign contributions, Pennsylvania's highest court ruled Thursday in wiping out what had been touted as a major bulwark against the gambling industry's influence.

The Supreme Court said the law's approach to banning all contributions was an overly broad and harmful attempt to combat corruption -- or even just the appearance of corruption -- that violated the state constitution's guarantee of free speech.

Writing for the 5-1 majority, Chief Justice Ronald D. Castille also said the blanket ban was out of step with the law's intent. In the law, lawmakers wrote it was necessary to prevent corruption that may result from ''large campaign contributions,'' but went on to prohibit all such contributions.

Castille did not rule out the constitutionality of a limited ban that capped political campaign contributions from the gambling industry at a certain amount.

''A statute that limited the size of contributions, rather than absolutely prohibiting any contributions, would be more narrowly drawn to accomplish the stated goal,'' he wrote.

Pennsylvania's day of reckoning over its multibillion-dollar pension promises to government employees and teachers has been pushed back for the better part of the past decade.

But long-expected increases in costs are scheduled to kick in three years from now, and meeting those retirement obligations could cripple state government and school boards.

Depending on what happens in the stock market, taxpayers could soon find themselves stuck paying more than $5 billion in additional annual payments.

The figure is a moving target. But in a March presentation to a state House panel, the state's two large public-sector pension plans estimated that the $821 million a year they currently get in "employer contributions" - the vast majority of it from taxpayers - will need to grow to $5.7 billion a year by 2012.

Even more frightening is that those numbers involve assumptions that could be overly optimistic. For example, the state government pension system's numbers assume it will earn 8.5 percent this year, but its 2009 investments are currently about 6 percent in the red.

Gov. Ed Rendell's administration received a cool reception from Republicans yesterday when he took the first step toward legalizing video poker in bars as a way to raise up to $550 million for college students in the state.

"We have an immediate need for tuition relief for college students," Kathleen Shaw, a deputy secretary of education, told a House panel during the initial public hearing on the legislation. "Incredible educational benefits would come to our state if the Tuition Relief Act is passed."

She said many families are racking up debt of $40,000 or more to meet the rising costs of college, and the state needs to help them.

But critics, such as Rep. Curt Schroder, R-Chester, attacked the proposal, which would put up to 70,000 video poker machines in 14,000 bars and clubs around the state that have state liquor licenses.

"Video poker is one of the most addictive forms of gambling," he said. "It will be destructive of our neighborhoods by turning thousands of bars and restaurants into mini-casinos."

Stephen Drachler, executive director of A United Methodist Witness, also was critical, saying video poker "is the crack cocaine of gambling. It is a bad bet for Pennsylvania."

The state House has narrowly defeated the latest attempt to force Pennsylvania drivers to put down their cell phones while behind the wheel.

After three-plus hours of often raucous debate, the chamber voted 100-95 Wednesday against an amendment that would have required drivers to replace hand-held cell phones with hands-free devices.

Later, the House voted to impose an additional $50 fine on those caught driving carelessly if they also were using a hand-held cell phone or were text-messaging.

Pittsburgh officials begged the state yesterday for stricter gun rules, but instead they saw the political firepower of gun owners aimed at them.

In the wake of the April 4 killings of three police officers in Stanton Heights, City Council unanimously passed a resolution asking the General Assembly to allow municipalities to pass their own gun laws and to join the city in requiring that owners report loss or theft of guns.

Not so fast, said state Rep. Daryl Metcalfe, R-Cranberry, who offered a different idea: legislation to make municipalities pay groups that successfully challenge local gun ordinances in court.

He said his bill is meant to "financially deter and/or punish" municipalities that "blatantly violate" state law. The state code doesn't let localities "regulate the lawful ownership, possession, transfer or transportation of firearms."

"This is ludicrous," said city Councilman Bruce Kraus, when informed of Mr. Metcalfe's effort.

"This is just an attempt to bully municipalities into submission."

Last week, Mayor Luke Ravenstahl joined Gov. Ed Rendell in urging Congress to reinstate a lapsed ban on assault weapons and asked the General Assembly to pass a lost-and-stolen gun reporting law and allow local firearms regulation -- just what council sought yesterday.

Attorney Paul Wright of Seattle-based Prison Legal News was stunned when he filed a right-to-know request with the Pennsylvania Department of Corrections and was told the department didn't have the information he sought.

Wright wanted records on lawsuit settlements. The department responded that it isn't required to create records.

"I call it the 'Right to Know Nothing Law,' " Wright said of Pennsylvania's open records statute.

Pennsylvania's updated law was supposed to start an era of transparency Jan. 1, but it has raised troubling issues along the way.

On the upside, public interest is heightened, said Terry Mutchler, director of the Pennsylvania Office of Open Records, who is swamped with inquiries and appeals from denials. Mutchler said citizens, not journalists, have led the way, filing more than 90 percent of the nearly 300 pending appeals.

Pennsylvania's state government may not be open and accountable enough as it handles federal stimulus money, the state's fiscal watchdog warned in a letter to federal officials that The Associated Press obtained Monday.

Auditor General Jack Wagner's letter to a U.S. Government Accountability Office administrator warned that internal controls are so weak that information about how stimulus funds are spent will be unreliable without oversight from an independent audit agency.

"We are extremely concerned about the potential for a lack of statewide government transparency and accountability in the use of these vitally important funds," Wagner wrote to Phillip R. Herr, the federal agency's director of physical infrastructure issues.

Wagner listed Medicaid, low-income heating aid and weatherization assistance as examples of federally funded programs administered by the state that have "significant internal control weaknesses." He said a significant issue was the limited scope of information provided for the audits his own office has performed.