"Even in tough national economic times, this budget shows thatPennsylvania has the resources and the resilience to keep moving forward,"Governor Rendell said. "Because we have worked hard over the past five yearsto trim the cost of government by $1.5 billion and control spending, we havebeen able to make major new investments in educating our children, repairingour bridges, and moving toward energy independence in Pennsylvania.

"This is a fiscally responsible budget that provides economic stimuluswith much-needed capital for community and business development. It will helpcreate thousands of jobs that can't be outsourced and will invest ininnovative energy programs that will help us break free from our dependence onforeign sources of oil.

"We accomplished these important goals while preserving the Rainy Day Fundand without increasing taxes," the Governor said. "With this budget,Pennsylvania is well positioned for whatever lies ahead."

INVESTING IN OUR STUDENTS, PREPARING FOR THE FUTURE

The new budget increases funding for education by $347 million and itcontinues to fund successful initiatives that are benefiting children fromearly childhood through graduation. For the first time in 18 years,Pennsylvania's school districts will benefit from predictable state fundingthat's designed to ensure that all children have the opportunity to succeed.

"This historic funding formula is a major step toward the ultimate goal ofproviding every child and every school with the resources needed to ensureacademic success," Governor Rendell said. "For too long, the quality ofeducation across the commonwealth has been based more on the wealth of thecommunity rather than the potential of the child.

"Today, we begin a better way of funding our schools," the Governor said,"a system where fairness is the benchmark."

The funding formula will drive additional state resources to each ofPennsylvania's 501 school districts, with every district being guaranteed atleast a 3 percent increase in basic education funding. Larger increases willgo to those districts identified in the General Assembly's Costing-Out Studyas needing additional resources to aid student achievement.

"The 2008-09 Education budget not only benefits school districts and thecommonwealth's students, but every Pennsylvania homeowner. When the statelives up to its responsibility for education funding, we reduce the pressureon local property tax increases."

REBUILDING PENNSYLVANIA

"Building and repairing long-term infrastructure assets - bridges, dams,water lines, sewer systems, airports, railroads and flood mitigation - willkeep the commonwealth competitive for decades to come," Governor Rendell said.

"By investing more than $2 billion in infrastructure improvements, weguarantee the creation of thousands of jobs and an immediate economic boost bypurchasing tons of steel, concrete and other building materials."

"Since I took office, we have nearly tripled the amount of money availablefor bridge contracts," Governor Rendell said. "Funding in this budget willtake us even further in our long-standing goal of dramatically cutting thenumber of structurally deficient bridges in Pennsylvania."

Despite increased funding, Pennsylvania leads the nation with more than6,000 structurally deficient bridges, which while safe, are in need ofmaintenance to avoid being closed or posted with weight restrictions.

Under Governor Rendell's Rebuild Pennsylvania program, a combination offederal and state funds, including $350 million in bond funds, will underwritebridge projects that will be included in the state transportation improvementprogram. The combined funding will allow PennDOT to start repairs on 411bridges this year.

Pennsylvania is facing an urgent need to address its drinking water andwastewater infrastructure. These aging systems are plagued by continuedcombined overflows, leaking and deteriorated collection systems, deferredrehabilitation and replacement work, and a shortage of treatment capacity.

The price tag for these unmet needs is staggering. According to a federalClean Water Needs Survey, Pennsylvania is facing nearly $11 billion in unmetdrinking water infrastructure needs and at least $7.2 billion in unmetwastewater infrastructure needs. And those totals do not even take intoaccount the additional millions of dollars that are needed in ongoingoperation and maintenance costs -- the tab for which just continues to rise.

Making these investments today is critical if Pennsylvania is going tocontinue growing its economy and providing for the safety, health and welfareof its citizens. Residents and businesses depend on a safe and reliable supplyof water. If our infrastructure is allowed to deteriorate, so, too, willPennsylvania's business climate and quality of life.

The budget agreement includes $800 million to begin upgrading the state'sunsafe dams and rebuilding water and sewer infrastructure in communitiesacross the state. In November, voters will have a chance to approve anadditional $400 million to invest in water and sewer infrastructureimprovements.

Additionally, thousands of new jobs will be created with the enhancementof two successful programs that are designed to help businesses grow.Enhancing the Keystone Opportunity Zones program and $12 million investment toensure Pennsylvania's continued status as a world-class center in the lifesciences sector.

CREATING ENERGY INDEPENDENCE

As part of the budget process, Governor Rendell worked with legislators toinvest $650 million in one of the most promising sectors of the economy: theemerging new technologies and innovative ideas that can help residents andbusinesses lower energy bills and reduce America's dependence on foreign oil.

"The only way to secure our energy future is to take steps now that allowPennsylvania to be more energy efficient and conserve our natural resources,"Governor Rendell said. "We cannot reduce our dependence on foreign oil unlesswe make better use of clean, renewable energy and invest in our own home-grownfuel resources as proposed in the PennSecurity Fuels Initiative.

"The legislation that has been passed as part of this year's budget is afirst step in addressing those issues. We're making an unprecedentedinvestment to spur development of advanced energy resources that will offernew options to consumers at a time when gasoline, diesel fuel, electricity andnatural gas prices are going through the roof."

The Governor said he intends to sign bills addressing these issues in thefollowing days. In total, these measures will invest $665.9 million inalternative energy, of which $237.5 million will go to consumers to lowertheir energy costs and help them join the new energy economy, and $428.4million will go to create jobs and expand the alternative energy sector inPennsylvania.

Additionally, Pennsylvania will increase the use of biofuels in retailgasoline and diesel fuel by requiring that every gallon of diesel fuel use anincreasing percentage of biodiesel as in-state production levels increase andreach defined thresholds. Also, gasoline must include at least 10 percentcellulosic ethanol once production reaches 350 million gallons annually. Newinvestments will also be made in Pennsylvania's biofuel producers; up to $5.3million will be available annually through June 2011 to encourage theproduction of ethanol and biodiesel.

"We need to ensure our citizens and businesses have choices, are protectedfrom the volatility of the electricity open market, and have the tools theyneed to conserve energy to cut costs. I'm committed to working with thelegislature throughout the summer to reach agreement on improvements to ourcurrent energy policy so that rather than shelling out billions of dollarsmore in higher electricity bills, we can help consumers save billions ofdollars over the next decade."

CARING FOR PENNSYLVANIANS

"Unlike other states across the nation that are dealing with the prospectof making deep cuts in social welfare programs, this budget will helpPennsylvania to continue to provide for the critical needs of Pennsylvania'smost vulnerable citizens," Governor Rendell said.

The budget will enable Pennsylvania to provide affordable health carecoverage for 186,000 children -- an enrollment increase of nearly 11 percentover 2007-08. Additionally, the spending plan will help expand child careservices to 2,600 more children and provide assistance to 77,665developmentally delayed children.

Children with autism spectrum disorder and their families will receiveunprecedented new protections to receive the services and treatment they need.Working with Speaker Dennis O'Brien, the department worked hard to passlegislation that will assure that private health insurers shoulder their fairshare of covering autism treatments up to $36,000 per year. Thisgroundbreaking legislation will improve access to services for thousands ofchildren and their families living with autism by building a stronger providernetwork, and is considered one of the best laws in the country.

Other highlights of the spending plan include: -- Raising reimbursement rates by $21.7 million ($10.2 million state funds) to improve access to critical Medical Assistance services, including home health care services for children, dental care, and primary care physicians; -- Serving an additional 2,600 children in the next year by expanding investments in high quality pre-kindergarten through the Pennsylvania Pre-K Counts program; -- Doubling the funding for autism services to adults from $23.4 million to $46.4 million in state and federal funds; -- Serving an additional 2,930 children with physical and developmental disabilities with Early Intervention services; and -- Serving an additional 2,100 older Pennsylvanians and an additional 1,300 people with disabilities by expanding the availability of community services. MANAGING RESOURCES RESPONSIBLY

Overall, the new budget increases spending by 3.98 percent compared tolast year. More than 32 percent of the increase in the General Fund budget, or$347 million, is for education.

The commonwealth is leading by example in these challenging economic timesby cutting the cost of running the government and continuing to find new waysto deliver services more efficiently. Through management and productivityinitiatives, the Rendell administration is saving $1.2 billion annually in thecost of operating government.

"This was a tough budget year," Governor Rendell said. "But because of thestrategic, targeted investments we made over the past five years we are inmuch better shape than most states," he said, noting that 29 states plus theDistrict of Columbia faced an estimated $48 billion in combined shortfalls.

"This budget, and the investments in energy, infrastructure and education,continues the progress we have made and create long-term benefits forresidents across the state," Governor Rendell said. "But, our work does notend here.

"I promise to continue fighting this fall for the important legislationthat is needed to provide access to basic health care for working adults,protect residents from electricity rate spikes, and other issues that areimportant to residents across the state."

Graphics, budget highlights and additional details about the 2008-09 statebudget are online at www.budget.state.pa.us.

The Rendell administration is committed to creating a first-rate publiceducation system, protecting our most vulnerable citizens and continuingeconomic investment to support our communities and businesses. To find outmore about Governor Rendell's initiatives and to sign up for his weeklynewsletter, visit www.governor.state.pa.us.

CONTACT:

Chuck Ardo

717-783-1116

SOURCE Pennsylvania Office of the Governor