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For Immediate Release
July 21, 2009
Contact: Rita Zielonis
(717) 787-3280

Senate Sends Balanced, "Responsible" Budget Back to House

As amended HB1416 will restore student aid, higher education funds, avoids PIT increase

The Senate amended and approved a balanced state budget bill Monday which restores support for higher education and student aid without a personal income tax (PIT) increase, according to Senator Gene Yaw (R-23).

The Senate-amended version of House Bill 1416 reinstates higher education and PHEAA funding to the General Fund and reduces overall spending by almost $2 billion from the version approved by the House.

The bill now returns to the House of Representatives for concurrence.

"The version of House Bill 1416 that the House sent over was unacceptable. It gutted higher education funding as a way to pressure the Senate to support a PIT increase," Senator Yaw said. "As amended, House Bill 1416 is a balanced, responsible budget that restores higher education and does not require a broad-based tax increase."

As approved by the House, House Bill 1416 called for overall spending of $29.1 billion and did not account for the $1.3 billion in revenue necessary to cover a proposed special fund for State System of Higher Education (SSHE) universities, community colleges and PHEAA.

"I believe the action taken by the Senate will help reassure our college students that they can continue their education without an additional unexpected financial burden," Yaw said.

The amended version of House Bill 1416 also restored funding to eight line items in the Department of Agriculture, including agriculture research, crop insurance, farm safety, agricultural conservation, easement administration, Pennsylvania fairs, the Center for Agricultural Excellence and the Animal Health and Diagnostic Commission.

"With agriculture being our number one industry, I am pleased we were able to restore funding to these programs that promote the viability and profitability of agriculture across our state," said Yaw.

As amended by the Senate, House Bill 1416 reduces overall spending to $27.14 billion for Fiscal Year 2009-10. The plan includes the reductions proposed in Senate Bill 850, accepts the $500 million in reductions proposed by the Governor on June 26, and incorporates about $72 million in reductions, which were agreed upon by the four legislative caucuses and the Governor. This amended budget also projects a zero percent increase in revenues.

"Overall, the spending plan approved is a modest 3.6 percent lower than Fiscal Year 2008-09.  Hopefully, the House of Representatives will agree that a spending reduction of less than 4 percent is something we can all live with in these difficult economic times," said Yaw.