HARRISBURG — Philadelphia businessman Tom Knox on Friday dropped out of the Democratic gubernatorial nomination race and said Allegheny County Executive Dan Onorato is the party's best hope for holding onto the governorship.

Knox, a millionaire whose wealth made him an important wild card in the crowded field of candidates, said he decided last weekend to quit the race because his wife does not want him to run. He said he is impressed by Onorato's track record and promised to support his campaign.

Knox said a nomination battle could divide the party and help the Republicans win in November.

STATE COLLEGE — Rising health care costs and a looming state pension funding crisis threaten to add more financial uncertainty to Penn State's already tight budget, university president Graham Spanier said Friday.The school on Friday received a long-delayed portion of the $334 million in state subsidies and federal stimulus funds held up for months by legislative gridlock in Harrisburg. But appropriations have been shrinking, and the university isn't sure what will happen when stimulus money dries up.The state workers' pension system is expected to require massive infusions of cash in the coming years, and Penn State could be forced to find tens of millions of dollars annually to make up for shortfalls.Spanier said Penn State will not need to raise tuition rates at midyear to make up for current budget pressures.

PHILADELPHIA — A friend of convicted former state Sen. Vincent Fumo must serve a year of home confinement for taking $287,000 for little- or no-work state contracts.Former police officer S. Michael Palermo also must serve five years probation after his federal sentencing Friday.The 69-year-old Palermo is a close friend of the long-powerful Fumo, a Philadelphia Democrat. Fumo is serving a 55-month sentence for defrauding the state and two nonprofits of millions.Palermo ran Fumo's farm near Harrisburg and did errands for him while earning $150 an hour from the state. He says he did some state work from 1999 to 2004, but nowhere near enough to justify the pay.

BROWNSVILLE — A high school teacher has been suspended for 30 days without pay after she appeared in a picture someone else posted on Facebook that included a male stripper at a bridal shower.Brownsville Area School District officials aren't identifying the teacher who was suspended last month.The school district's attorney, Jeremy Davis, says public comment on the issue won't be allowed when the school board meets next Thursday. That hasn't stopped board members from commenting to Pittsburgh-area television reporters anyway.Board member Stella Broadwater says the suspension is appropriate because the photograph became public, but member Sandra Chan says it was too harsh because the teacher had no control over the photo being posted.

HARRISBURG — Gamblers are putting more money into slot machines in Pennsylvania than they are in Atlantic City, N.J.The Gaming Industry Observer says December was the first month ever that slot-machine handles in Pennsylvania surpassed Atlantic City's.Editor Joseph Weinert calls it a milestone that is a result of declining slots play in New Jersey and rising slots play in Pennsylvania.The difference was $2.1 billion in Pennsylvania to about $2 billion in New Jersey.