budget negotiations

HARRISBURG -- The wee hours of early Monday morning yielded the first on-time budget agreement during Gov. Ed Rendell's six-year administration when he and legislative leaders announced a handshake deal they deemed fair and necessary during difficult economic times.

The budget proposal calls for a 3.8 percent spending increase -- 0.4 percentage points fewer than what Rendell called for in his original budget proposal. He said he cut a little more than $500 million from his proposal, reductions he said were unfortunately necessary while a struggling economy shrinks tax revenue.

The legislative leaders who spoke, Republicans and Democrats alike, echoed Rendell's remarks. Everyone had to accept displeasing parts of the budget to make sure an agreement was reached before state workers were furloughed, they said.

House Majority Leader Bill DeWeese (D-Fayette County) talks with reporters after leaving to review the GOP's proposal: Politicker Photo

UPDATE, 1:18 a.m.: We have a budget! Rendell has just announced they have reached a budget agreement in principle. 

Here are the highlights:

• Spending increased 3.8 percent, down from Rendell's February proposal of 4.2 percent.
• Rendell said he made about $525 million in cuts, which he said were necessary during difficult economic times.
• First time a budget agreement, even in principle, has been reached before the June 30 deadline during Rendell administration.
• All sides emphasized they thought deal was a fair compromise.
• Budget now will take about three days to go through the necessary parliamentarian hoops to reach the governor's desk. But for all intensive purposes, Pennsylvania has a budget for the 2008-09 fiscal year.

HARRISBURG -- Budget negotiations among Democratic and Republican leaders have gone from productive, to disappointing, to non-existent in fewer than three days after they did not meet Saturday.

But the negotiators don't seem worried.

Although they reiterated their displeasure with the other side's budget, each also said Saturday's absence of talks doesn't shake their optimism that a "handshake" agreement can be reached by Monday's June 30 deadline.

House Speaker Dennis O'Brien (R-Philadelphia) tells reporters meetings tonight between leaders are "unlikely.": Politicker Photo

UPDATE, 5:20 p.m.: A full account of Saturday's budget developments has been posted:

• No talks Saturday, but optimism remains for handshake agreement by June 30

UPDATE, 3:00 p.m.: Senate Republican leaders just visited the Capitol press room to say they're not concerned about not meeting with Democratic leaders today.

Senate Majority Leader Dominic Pileggi (R-Delaware County) would not say the negotiations have broken down or even that they are at an impasse. But he and Senate President Pro Tempore Joe Scarnati (R-Cameron County) reiterated their dismay at Democrats' efforts to cut the budget last night, which they said were about $200 million short.

Pileggi still thinks a deal will be reached within days.

"I'm frankly optimistic we'll have an agreement in principle by Monday," he said.

Republicans said talks could resume at noon tomorrow.

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UPDATE, 2:15 p.m.: Well, that was quick. What was expected to be a long night for PolitickerPA.com abruptly ended a little after 1:30 p.m. when Pro told reporters legislative leaders would not meet for talks tonight.

Speaker of the House Dennis O'Brien (R-Philadelphia) came to talk to reporters shortly afterward, ostensibly to speak about his autism insurance bill. But soon questions shifted to the budget, and the he eventually admitted talks between the leaders were "unlikely" tonight.

But he remained optimistic. The speaker said staffs from each side are still talking, and he said the nature of talks could change with a single phone call.

PolitickerPA.com will stick around a little longer to see what's what and to fish out Republican response, which is still forthcoming.

HARRISBURG -- With a June 30 deadline looming to resolve Pennsylvania's budget showdown, Republicans emerged from Friday night's negotiations at the Capitol saying they needed between $200 million to $250 million in cuts to agree to a deal.

Democrats emerged from the same meeting saying they've already cut $600 million and accused Republicans of shifting their demands.

The two sides agreed only that the night's talks were disappointing.

House Appropriations Chairman Dwight Evans (D-Philadelphia) walks back to Pileggi's office.: Politicker Photo

UPDATE, midnight: A full account of Friday night's negotiations has been posted:

• Budget negotiations to resume Saturday after 'disappointing' Friday talks

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UPDATE, 10:20 p.m.: The lawmakers have finished a night of negotiations all sides considered disappointing. PolitickerPA.com will post more details later, but it's never a good sign when each side presents wildly different versions of what happened. Republicans say there weren't enough cuts; Democrats say they've already made $600 million in cuts and simply didn't make the ones Republicans wanted.

Breakdown? Not quite, but the outlook for a timely resolution certainly became much bleaker tonight.

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UPDATE, 9:35 p.m.: Game on! Democrats have returned to Pileggi's office, and both sides are apparently negotiating again.

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UPDATE, 9:00 p.m.: Now they really are on opposite sides of the aisle. All the Democrats in the negotiations just walked across the third floor of the Capitol from Pileggi's office to offices across the hall. Republicans remain in Pileggi's office.

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UPDATE, 8:50 p.m.: Erik Arneson, Senate Republican spokesman, is frequently the liaison between the group of reporters gathered outside Pileggi's office and the lawmakers inside.

Here's his take on what's keeping the two sides apart:

"Really is a fundamental difference on how much money is spent"

The two sides are sparring over individual programs within the governor's energy, health care and education proposals, he said.

Asked if the budget will be solved this weekend, he responded, "We're closer now than we were this morning."

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UPDATE, 8:05 p.m.: Lawmakers and their entourages are streaming into Senate Majority Leader Dominic Pileggi's office -- world headquarters for Pennsylvania budget negotiations.

They're notoriously difficult to get quotes from as they rush behind the fortress-like doors of Pileggi's office despite reporters best efforts

Asked if they could agree on a deal tonight, Scarnati responded, "The intent is there."

House Appropriations Chairman Dwight Evans (D-Philadelphia), who walked in with House Majority Leader Bill DeWeese (D-Fayette County) said, "We'll keep our fingers crossed," as he, in fact, crossed his fingers.