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State lawmakers finally close in on budget deal

But Gov. Rendell says he's not in agreement

HARRISBURG — Pennsylvania lawmakers plan today to disclose details of what they say is an emerging plan to get a state budget passed.

But Gov. Ed Rendell said he is not on board. He's disputing reports of an imminent agreement.

Pennsylvania is the only state in the nation still fighting over its budget.

Lawmakers expect to have a news conference today to outline the emerging plan to offset spending of nearly $28 billion.

They say revenue will come from the legalization of poker and other table games at the state's slot-machine casinos, a higher business tax and a 25-cents-a-pack increase in the cigarette tax.

"We'll have more facts for you tomorrow as relates to the facts of the deal," House Majority Leader Todd Eachus, D-Luzerne, a key negotiator, said Thursday night.

Despite the air of optimism, Rendell said as he left the Capitol on Thursday evening he was not on board and disputed reports of a possible budget deal.

"That's wrong," he said. "No deal with me."

Rendell's chief of staff, Steve Crawford, said the plan he saw Thursday does not meet the governor's key requirements to sign a budget plan — enough revenue to sustain current spending over the next two years and no further cuts to what he has proposed for education and health care.

At issue is how to resolve a multibillion-dollar revenue shortfall driven by the recession, complicated by a partisan political battle over whether to bridge the gap through increased revenues, spending cuts or a combination of the two.

A spokesman for Senate Majority Leader Dominic Pileggi, R-Delaware, said discussions between top legislators had been productive.

"There is a growing sense of optimism, and we hope to have more to say tomorrow," spokesman Erik Arneson said Thursday.

The few details that were available on the record came from Crawford and House Minority Leader Sam Smith, R-Jefferson.

Smith told reporters he was not a party to the deal, but had been briefed on it. He said the total amount of spending was too high, and House Republican members were opposed to its taxes.

"We can't find ourselves in the position of raising taxes," he told reporters. "We think it's the wrong direction for Pennsylvania."

The emerging plan would require an increase in the capital stock and franchise tax rate, currently 1.89 percent, to 2.89 percent.

Smith said the outlines of the deal were apparently hammered out on Wednesday and presented to Rendell on Thursday.

Pennsylvania is now the only state that has been without a comprehensive budget in place since the fiscal year began July 1.

Last month, Rendell signed a partial $12.8 billion budget that ensures state employees get their paychecks on time and the poor get medical care. It also has allowed government offices, prisons and state parks to remain open.

But it included no money for a wide range of social services, and advocates for children, the disabled and poor people say the state's social safety net is torn wider every day the impasse continues.

Many private service providers, including mental health centers and libraries, have laid off employees, cut back hours or taken out loans to survive while their unpaid bills have piled up.

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