HARRISBURG -- President-elect Barack Obama will meet today with Gov. Ed Rendell and the chief executives of other states to discuss ways the federal government can help them amid the nation's economic crisis.
The meeting comes a day after Mr. Rendell learned that his state's fiscal outlook was even bleaker than before. According to figures released yesterday, the state's budget deficit, already estimated at $565 million for the fiscal year, grew by $93 million in the month of November, due largely to declining tax revenues.
Mr. Obama, along with Vice President-elect Joseph R. Biden Jr., will travel to Philadelphia to talk to the National Governors Association. Mr. Rendell is currently NGA chairman. NGA officials said the incoming duo will discuss "the unique challenges facing states during this economic crisis."
Mr. Rendell "hopes to hear that the new administration understands the plight of the states and will act quickly to address it," said Rendell spokesman Chuck Ardo.
Yesterday, leaders of both the NGA and the National Conference of State Legislatures called on federal officials "to take early action to stabilize the nation's economy."
Mr. Rendell and other governors met with congressional leaders in Washington, D.C., yesterday asking for at least $40 billion to help pay for health care for the poor and disabled.
The governors are also pressing for as much as $136 billion worth of infrastructure projects like road and bridge repairs as the Democratic-controlled Congress and Mr. Obama prepare economic recovery legislation that the president-elect\ hopes to sign immediately upon taking office.
According to the governors association, 20 states have already trimmed $7.6 billion from their fiscal 2009 budgets. Mr. Rendell has cut more than $300 million from Pennsylvania's current budget of $28.3 billion.
But besides the budget cuts already made, the NGA said, 30 states are expecting more than $30 billion in additional revenue shortfalls.
"States feel the greatest impact on their budgets in the year after a recession ends, primarily because Medicaid growth occurs late in the recession and employment growth lags [behind] the recovery," the NGA said. Medicaid uses state and federal money to pay health costs of low-income people and senior citizens.
NGA spokeswoman Jodi Omear said the governors won't be asking the new president today for specific amounts of money but will mention some current federal programs that help states.
"Many of the most effective methods to speed economic recovery involve investing in existing federal-state programs," she said, such as money to fix roads and bridges, for unemployment benefits, for Medicaid payments and for food stamps.
The governors wrote to congressional leaders in two Oct. 27 letters posted on their Web site, www.nga.org (and then click on "letters").
Mr. Obama already is discussing a program to rebuild roads and bridges around the nation as a way to put people back to work and make transportation safer.
"Investments in ready-to-go infrastructure projects are a cost-effective creator of high-paying jobs," said Mr. Rendell. He will push for "a broad array of projects, including airports, bridges, highways, transit systems, ports, rails, clean water, sewers and broadband."
Pennsylvania's current fiscal year will end June 30. Besides the $311 million in cuts already identified, Mr. Rendell wants additional spending trims in departments he controls.
He has urged the Legislature and independent agencies, such as the Pennsylvania Turnpike Commission, to do the same.
According to a monthly Revenue Department report released yesterday.
For the first five months of fiscal 2008-09 (July-November), tax revenues and investment income totaled $9 billion, which is $658 million less than had been expected, according to a report released yesterday by the state Revenue Department.
By the end of the current fiscal year on June 30, Mr. Rendell has warned, the revenue shortfall could end up between $1 billion and $2 billion. He has vowed to do all he can to avoid seeking a tax increase next year but hasn't totally ruled out the possibility.
He also has told state agencies to expect serious reductions for some programs in the fiscal 2008-09 budget, which was approved in July. He says he wants to hear "no whining" about those cuts.
Sales tax receipts totaled $648 million for November, which was nearly $25 million below the estimate made when the budget was approved in July. So far this fiscal year, sales tax collections are $3.6 billion, which is $116 million, or 3 percent, less than anticipated. The current recession is frequently blamed for making people keep their wallets shut.
Another major money-maker for the state, the personal income tax, produced $765 million for November, or $4 million below estimates. So far this fiscal year, PIT collections are $3.8 billion, which is $76 million, or 2 percent, below estimates.
Also in November, the corporation tax brought in $51 million, which was $28 million below expectations. For the year so far, corporate taxes total $815 million, or nearly $150 million below estimates.
That money all goes into the state's general fund. Another significant pot of money, the motor license fund used to pay for state police and other expenses, is also lagging. Fiscal year-to-date collections total $1 billion, or $112 million below estimates.
