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Governor Casey looms large in highly political Pa. budget battle

THE BALTIMORE SUN

HARRISBURG, Pa. -- Jeff Benson, a 38-year-old supervisor for the Pennsylvania Department of Revenue, canceled his family's vacation this summer, isn't sure he will be able to buy the house he agreed to purchase last month and wonders each day how long the commonwealth will keep paying his salary.

Eileen Myers, a social worker and single parent supporting three children on $325 a week, walks three blocks to the supermarket every other day rather than spend the money to put gas in her car.

Diane Johnson, an outreach worker and the mother of four children, is looking for work after being laid off last week by the Employment Project, a Philadelphia-based agency that depends on state funds to help the homeless find housing, jobs and counseling.

"I'm back on welfare," said Mrs. Johnson, 35.

Pennsylvania is broke.

It can't pay its workers beyond next week and has stopped paying contractors for goods and services.

Hammered by a recession, the commonwealth finished the fiscal year that ended June 30 with a $467 million deficit and, legislators say, must raise an estimated $3 billion in new taxes to make ends meet this year.

So far, the General Assembly -- politically divided and faced with the painful choices of what services to cut and what taxes to raise -- has failed to come up with a budget.

The dispute is based in politics -- and involves a cast of characters and a plot with suspense and intrigue to rival any cheap thriller.

At its center is Robert P. Casey, the 59-year-old son of a coal miner from Scranton who ran for governor three times before his good looks, drive and sincerity propelled him to victory Nov. 3, 1986.

The cast includes an energetic House Democratic majority leader and a shrewd House minority leader who stands to gain along with his party if a tax-laden budget is identified with the Democrats and they lose big at the polls in 1992.

Amid all this, there are constant rumors that Governor Casey, who suffered a mild heart attack in 1987 and had quadruple bypass surgery, may resign before his term expires because of ill health.

"I'm going to be here for a while whether you like it or not," he told reporters last week.

Governor Casey, a Democrat, won re-election last November despite claims from Republicans that Pennsylvania was facing a recession and that he had failed to see it coming and to take corrective action.

Those charges have come back to haunt him now.

"He lied to us, he lied to the people of this commonwealth," said House Minority Leader Matthew J. Ryan, R-Delaware County.

Mr. Casey's popularity has plummeted as he has worked for passage of his $13.6 billion budget, proposed May 23, which calls for $2.6 billion in tax increases.

Increases proposed include raising the personal income tax by 17 percent, which would cost a taxpayer $35 for each $10,000 earned; increasing business taxes; and increasing the cigarette tax by 30 cents to 48 cents a pack.

Vincent P. Carocci, the governor's spokesman, says that it is fighting between Democratics and Republicans in the General Assembly that is holding up the budget and that it isn't the chief executive's fault if legislators cannot agree.

But that message doesn't seem to be getting out.

Throughout Pennsylvania, newspaper editorials have blasted Mr. Casey along with the General Assembly for the budget stalemate.

The most vocal advocates for an agreement are the 97,000 state workers who face the specter of life without paychecks later this month.

If lawmakers cannot pass a budget by Friday, about half the workers stand to go without pay. The other half would miss a paycheck July 26.

Each night, television news reports are beamed to local stations statewide showing hundreds of angry state employees shouting and cheering at rallies organized by union leaders in the Capitol's picturesque, marble-lined rotunda.

"Why can't the governor just sit down with them and have them work together? They'd get a lot more done," said Rose Cook, who has watched the demonstrations most nights on a large-screen television in the Locker Room Tavern in Carlisle, a town about 20 miles southwest of Harrisburg. "It just doesn't make any sense at all."

State workers have been rallying to slogans such as "We Will Remember in November," shouting them so loudly that their voices reverberate in the governor's staff offices.

They cheer union leaders' speeches, march the Capitol halls carrying protest signs and picket the building's entrances.

The tentacles of Pennsylvania's government run far and deep, so that the stakes are high.

Doctors are not getting paid for patients they treat on medical assistance, Pennsylvania's form of Medicaid; nursing homes are going without medical assistance payments; senior citizens are not getting property tax rebate checks of about $200 each; and funding for state highway projects is being held up.

Steven Kolbe, president of Joseph Ciccone and Sons Inc., a highway contractor in Bath, Pa., worries that without an infusion of state cash, he will probably have to halt work on the state-funded $13 million reconstruction of a portion of Interstate 80 near Stroudsburg. That would put up to 100 people out of work and mean increased traffic problems, he said.

"If people just knew that the bottleneck was going to be extended from two years to three years because of state politics, they'd just go crazy," said Mr. Kolbe.

The Republicans, who have been the minority party in the state House for a decade now, see 1992 as their chance to take control of the House and are not eager to sign on to any major tax proposals.

The Democrats control the House, 107-96, but Republicans are in the majority in the Senate, 26-24. Spending bills, including the budget, must originate in the House.

Being in the majority means getting to decide which bills get to the floor.

To get a budget passed, House Majority Leader H. William DeWeese, D-Greene County, says that he wants 20 Republican members to vote in favor of a tax increase, so that both his party and the GOP will share the political fallout.

He has refused to send a specific tax package over to the Republicans, saying he knows it "will just get shot to pieces" by GOP legislators.

"They're not willing to sign on to any plan because they smell blood and they don't want it to be any of theirs," said Mr. DeWeese, 41. "This is bald, blatant, brazen politics."

House Minority Leader Ryan said that the Democrats were asking his members to back a tax package without seeing its specifics.

"We want to see what they have to offer," said Mr. Ryan, 60, a lawyer and 29-year legislator.

Mr. Ryan said that the governor could have avoided many of the tax increases now proposed if he had cut back spending early last year.

"He forgot to adjust for the recession in his spending," he said.

The governor flatly denies that.

Sue Grimm, a spokeswoman for the governor's budget office, said the Wharton Econometric Forecasting Associates Group that does the state's forecasts anticipated continued economic growth throughout most of last year. When the forecasts were changed in late November, the governor immediately slashed spending and implemented an austerity plan that saved the general fund $871 million, Ms. Grimm said.

State employees say they haven't seen such a budget mess since 1977, when the General Assembly failed to pass a budget for seven weeks after June 30, the deadline for its passage, before they enacted a bare-bones, no-tax version that left out entirely any money for higher education. The fighting resumed that fall, ending finally with a tax package that didn't pass until mid-December.

The state workers say they hope that doesn't happen -- but would be relieved if the legislature would just pass a bare-bones budget to ensure them a paycheck beyond July 26.

Said John Heikes, 43, a clerk in the Department of Revenue, "It's a political game, and we're the casualties."

Casey proposals

Proposed increases in taxes and fees in Pennsylvania:

... ... ... ... ... ... ... ... 1991-1992 (in millions)

Personal income tax increase ... ... ... ... ... .. 770

Capital stock and franchise taxes ... ... ... ... . 613

Corporate net income tax ... ... ... ... ... ... .. 334

Cigarette, tobacco products tax ... ... ... ... ... 314

Retail liquor, cable TV and interstate telephone call charges ... 294

Sales tax, management consulting and PR services ... 94

Payment timing changes ... ... ... ... ... ... ... . 90

Utility gross receipts tax ... ... ... ... ... ... . 37

Various fee changes ... ... ... ... ... ... ... .. . 29

Tax enforcement and collection initiatives ... ... . 14

TOTAL ... ... ... ... ... ... ... ... ... ... .. $2,589

SOURCE: Budget Office of Gov. Robert P. Casey

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