Keystone Politics - Pennsylvania's Political Community

Budget: February 2009 Archives

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.

PA runs out of money for crap control

Pennsylvania has run out of money for reimbursing local sewage agencies for most of the cost of permitting and inspecting septic systems.

The state Department of Environmental Protection said Wednesday that rising costs have already exhausted the $6 million that was available for reimbursements through June 30.

Acting DEP Secretary John Hanger says there are currently 95 pending applications seeking more than a half-million dollars.

Pennsylvania's two major public-sector pension plans on Tuesday told state lawmakers that together their investments lost more than $28 billion in value last year.

Officials who oversee the separate funds for state workers and public school employees also warned that a sharp increase in taxpayer subsidies looms because stock market losses will make a long-anticipated 2012 rate spike much steeper than recently projected.

The two funds' percentage losses on investments were similar. The value of State Employees' Retirement System investments dropped 28.6 percent in 2008, while Public School Employees' Retirement System investments fell 29.7 percent.

In Lieu of Taxes, Pittsburgh Got Nothing

The city of Pittsburgh missed out on getting money from a coalition of nonprofit institutions last year, and will get less in the future than it did under a three-year pact that ended in 2007, officials said yesterday.

That means the Pittsburgh Public Service Fund joins state government on the list of recession victims that are shorting the city, which has a healthy bank balance but expects precarious budgets starting next year.

The fund, which has included around 100 medical, educational, charitable and cultural institutions, volunteered nearly $14 million to the city for the years 2005 through 2007 under a unique agreement aimed at helping the city recover from near-bankruptcy. The final payments came in last year, but were meant to satisfy the fund's pledge for 2007.

Months ago, the fund sent the city a draft agreement that would govern another three years of payments, said the Rev. Ron Lengwin, spokesman for the Catholic Diocese of Pittsburgh and for the fund. If it had been signed last year, the city could have gotten payments, he said.

"We had reason to believe that everyone was OK with that draft," he said. "We're waiting for them to sign the agreement."

Nutter Tries to Open Up As Critics Circle

With the reputation of his young administration on the line, Mayor Nutter is shelving what critics view as a go-it-alone governing style for a more transparent approach that harks back to his promise of "a new day, a new way."

At least that is the image his administration is trying to convey after complaints in the fall about how Nutter handled Philadelphia's first $1 billion deficit, and as he tries to claw out of a second budget hole of the same magnitude.

A handful of his advisers had sat for 30 consecutive days in a 14th-floor conference room of the Municipal Services Building, making decisions, before announcing plans in November to close library branches, swimming pools, and fire companies.

The public backlash was fierce.


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