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.

Thousands of unionized state workers can breathe a little easier because Gov. Ed Rendell has decided not to use "rolling furloughs" as a way to ease the state's budget deficit.

At least not for the next 15 months.

For the last several weeks he has been negotiating with three state employee unions about whether to require their workers to take unpaid leaves or furloughs -- two days per month, up to a total of 29 days -- to help the state save $90 million on labor costs. It was part of his plan to deal with a projected $2.3 billion deficit by the end of June.

But Mr. Rendell yesterday unveiled a tentative agreement with union leaders on another option for saving more than twice as much money by temporarily reducing the state's contributions to an employee health benefit fund.

Mr. Rendell said the state would save $200 million over the next 15 months by reducing the contributions, which he said won't affect employees' health care benefits. He said the fund now has $248 million in reserves and will remain "fiscally sound" even with the proposed 20 percent reduction in state contributions.

Former Mayor John F. Street said yesterday that he had struck no agreement with the Eagles to substantially reduce the team's $8 million debt to the city during private negotiations years ago that led to the building of Lincoln Financial Field.

"I didn't cut a secret deal. There was no deal. We didn't make a deal. . . . And if I had agreed to a deal, I would have put it in writing," Street said last night during a rare City Hall appearance.

"The one thing I did commit to," he continued, "is we would absolutely make a reasonable effort to come to a fair settlement and hopefully without litigation. It didn't happen."

In addition to asking residents to accept higher taxes to help close a budget gap, Mayor Nutter will ask elected officials today to give up two of their perks.

He is expected to forward to City Council a bill that would disqualify Council members and other elected officials from participating in the controversial DROP pension program.

At the same time, the mayor has begun pleading with those officeholders in phone calls to return their city-issued vehicles.

Doing away with both perks would not save a tremendous amount of money, but residents complaining about about how the city spends money singled them out.

"I have to take it on at some point in time," Nutter said in an interview yesterday.

As the most daunting fiscal crisis of a generation swirls around him, Mayor Nutter will present a budget next week to a City Council whose support for him remains stubbornly uncertain.

On March 19, Nutter will ask Council members and their constituents to accept deep service cuts, onerous tax increases, or both - requests that will severely stress the relationship between the mayor and Council.

"It's going to be testy," said Councilman Darrell L. Clarke, who as majority whip is responsible for rounding up votes in a body where allegiances are still evolving. "It may challenge that relationship."

Missed manners: PLCB is spending $173,000 to coach workers on how to talk to customers.

Liquor store clerks across Pennsylvania are about to get a crash course in manners.

The Pennsylvania Liquor Control Board is spending more than $173,000 to try to improve the manners of workers at its more than 600 state stores. The board wants to make sure clerks are saying ''hello,'' ''thank you'' and ''come again'' to customers coming in for wine and liquor.

''This is part of the renaissance of the Liquor Control Board,'' Joe Conti, the PLCB's chief executive, told The Philadelphia Inquirer for a story published Sunday. ''The point is to become a specialty retailer and not be known as a government monopoly.''

The board has hired a Pittsburgh consulting firm, Solutions 21, to help coach store managers on how to get their staff to be good sales reps.

The managers will then go into stores and instruct clerks on things like how to greet a customer, how to read a customer's cues and where to stand.

To a generation of Philadelphians, they are known simply as "the free clinics" - city-run health centers where one can get care ranging from pediatrics to dentistry to OB-GYN.

But they may not be free any more.

Even as public-health officials consider massive disruptions in health care - among the options on Mayor Nutter's desk is closing the city nursing home and up to three of the clinics - one change is increasingly likely: Patients without insurance will face fees on a sliding scale at all the centers.

The fees won't be a lot - tentatively a $5 to $20 co-payment per visit - but no one knows the impact on people who are struggling.

"Some will be happy to pay," said Cheryl Bettigole, clinical director of Health Center No. 10, in the Northeast, "but there's no question that it's going to be hard. It's a working-poor population. People are proud. If they can't pay, they might not come."

Even as the state struggles with a growing budget deficit, senators yesterday questioned why the Rendell administration is proposing to cut at least $20 million to hospitals that disproportionately serve Medicaid patients as well as the uninsured poor.

At a budget hearing of the Senate Appropriations Committee, both Democratic and Republican senators expressed concerns about Gov. Rendell's proposal to slash payments to those hospitals by roughly 15 percent in his proposed $29 billion budget for 2009-10.

With Pennsylvania's unemployment compensation fund plummeting by almost $400 million in six weeks, the Rendell administration said yesterday that it would seek federal help before the fund becomes insolvent, as early as next month.

The fund's balance, just under $1 billion at the end of December, slid to $602 million in early February as unemployment claims rose and contributions through payroll taxes decreased.

The unemployment rate in Pennsylvania has climbed to 6.7 percent from 4.9 percent a year ago. The state Department of Labor and Industry has processed an average of 46,000 initial claims a week since Jan. 1, a 52 percent increase over last year.

Sandi Vito, acting secretary of labor and industry, told the Senate Appropriations Committee yesterday that the state might request about $250 million from the federal government, but that the amount was not firm.

State Senate Republicans on Monday had harsh words for Gov. Ed Rendell's budget makers, questioning whether his spending plans could create an even bigger problem than the one he's already facing, resulting in ''disaster.''

Rendell's top budget and revenue aides appeared in front of the Appropriations Committee on the first day of what will be four weeks of hearings to study the state's finances amid a massive projected shortfall.