Budget Update – Governor Asks for Stop Gap Plan

Key negotiators in the House and Senate met this yesterday for the first in a series of public meetings that could end the 29-day state budget stalemate. The panel, called a Conference Committee, met in front of the media and general public for the first time in recent memory, a dramatic shift from the usual practice of top legislative leaders negotiating budget deals behind closed doors.

Later, Governor Ed Rendell announced he will ask the House to pass Senate Bill 850, the Senate Republican budget plan, to his desk, where he will then line-item veto everything but certain general government operations lines. Among the lines Rendell intends to remove is $11 billion in basic education funding, as well as $10 billion from the Department of Public Welfare.

Passage of Senate Bill 850 will allow the state to pay vendors and some of the 77,000 state employees who are currently facing payless paydays. Rendell said he will make this move on a temporary basis while he watches the Conference Committee try to come up with a budget plan that he can support.

While both of these moves are significant, neither should be construed to be a sign that final budget passage is imminent. We will keep you updated on all progress – or lack thereof – as the week unfolds.

APC talked with top PennDOT officials today to continue to get the latest on payments. It is our understanding that payments to contractors WILL CONTINUE under this budget scenario. We will keep you informed as we receive and updates. We ask that members contact APC if they are told (by an owner’s employee) of any disruption in payments to Commonwealth contractors.

Source: Triad Strategies Client Memo

07.30.09