Stimulus a Plus for PA

From the Wilkes-Barre Times Leader


Final stimulus bill will deliver for Pa. budget

By MARC LEVY (AP)

A massive new federal economic stimulus bill will deliver billions to Pennsylvania for highways, mass transit and school districts, although it will force Gov. Ed Rendell to plug a relatively small hole in the state's finances.

The news was a relief for Rendell, who had feared the implications of the Senate's version of the stimulus bill after it cut tens of billions of dollars for states. Rendell had based his budget proposal delivered last week on a more generous House bill.

A version expected to pass Congress in the next couple days will restore most of the money in the House bill, but not all. But filling that gap will be far less onerous than what Pennsylvania would have faced under the Senate's bill.

"To add another half a billion in cuts ... would have gone from a moderate level of cuts to a severe level of cuts," Rendell told reporters on a Thursday evening conference call.

Had the state lost $500 million, as the Senate bill would have dictated, state-related universities such as Penn State, museums and educational and health care institutions would have lost some or all their funding. Dollars for school districts and counties also would have plummeted, potentially forcing layoffs, Rendell said.

"So we have pretty much escaped a disaster," Rendell said.

Rendell has already ordered hundreds of millions in spending to be frozen as Pennsylvania faces a $2.3 billion shortfall this fiscal year amid a deepening national recession. He also cut another nearly $1 billion from existing programs in the budget he proposed for the 2009-10 fiscal year that begins July 1.

Rendell said Congress is still writing a funding formula, so it remained unclear exactly how much more money he must cut or find _ he speculated it could be another $60 to $70 million.

The White House and Congress struck a deal on a final $790 billion stimulus bill on Wednesday and details about it began emerging during the day Thursday.

All told, Pennsylvania will get more than $16 billion from the stimulus bill, including about $5 billion in aid for the budget, about $1.5 billion directly to school districts and another $1.7 billion for highways, bridges and mass transit agencies.

Some of the aid will be help for the jobless, such as unemployment benefits, food stamps, health coverage and more. It also includes a tax break of up to $800 for millions of lower- and middle-income taxpayers that would benefit 4.9 million Pennsylvanians, according to White House figures.

Rendell said shovels could begin turning dirt on some of those projects within a matter of four months, while some might take longer, up to nine months, to get contracts awarded.

According to White House estimates, the bill will create or save 143,000 jobs in Pennsylvania over the next two years, sixth-most jobs in the country. Since the recession began just over a year ago, Pennsylvania has lost more than 75,000 jobs.

Many of the jobs to be created will be in construction, Rendell said.

The bill also offers opportunities for the state to compete for money for air, rail and other transportation projects. One such project that Pennsylvania will pitch is for a rail connection between Scranton and the Pocono Mountains to New York City, Rendell said.