Pa. Wrestles with Application of New Federal Funding
Congress has finally approved more medical assistance money for states -- but less than had been expected.
And now Governor Rendell is calling for a nearly two-percent cut in state spending to help close a budget deficit he estimates at more than $280 million.
KYW's Tony Romeo reports that in addition to medical assistance money, Congress has also approved more money for education.
In the new state budget, Rendell got more money for basic education. And state senate majority leader Dominic Pileggi (R-Chester) says the governor also wants to apply all the federal education money to basic subsidies:
"School districts by my quick math would be receiving $580 million based on the governor's proposal."
But Rendell chief of staff Steve Crawford says it's too soon to say if the federal education funds can be used for basic subsidies:
"We don't have the specific direction from the feds yet as to how to apply that money."
If the federal education money can be applied to basic subsidies, and the governor eliminated the state increase, state senate Republicans say it could free money to balance the rest of the budget.
