2009-07-02 / Local & State

Pa. Budget Crisis Evokes Memories Of '91 Standoff


HARRISBURG, Pa. (AP) - Those who remember Pennsylvania's 1991 budget showdown can't help but see the parallels.

A Democratic governor in his second term gets waylaid by a national recession and dwindling tax revenues. Republicans who control the state Senate insist on cuts rather than tax increases. A new crop of legislative leaders bring change - and uncertainty - to the negotiating process.

It's too early to know whether other aspects of the '91 crisis will be repeated, from the scuffle between lawmakers on the House floor to organized protests by unpaid state workers and the record tax increase that ended it.

As of now, it appears likely that Pennsylvania will end its fiscal year at midnight Tuesday without a budget in place, a recurring theme since Gov. Ed Rendell took office in 2003.

But this year a steep falloff in tax revenues - and deeper philosophical divisions between the two parties - leave plenty of room for pessimism about whether a deal can be negotiated any time soon.

For starters, the scale of the problem this year is daunting. Pennsylvania finished its 1990-91 fiscal year with a $470 million deficit; this year the figure is projected to be about $3.2 billion.

State employees are being directed to keep coming to work after July 1, even though they will not get paid for it until a budget is in place. That generated daily protests in the Capitol Rotunda in 1991, including shouts of "Paycheck, paycheck'' and signs that said: "Don't pass the buck - pass the budget.''

Rendell administration officials say they are still trying to figure out what else will happen if the state goes deep into July without spending authorization, but there will be other repercussions. The budget talks could take on a life of their own.

Ten days into the 1991 standoff, Gov. Robert Casey likened the fallout from the state's inability to spend to "a giant snowball rolling downhill'' and said he was "increasingly concerned and alarmed by the runaway spending proposals now under active consideration.''

One of those spending proposals was voted down the night of July 19, when only 85 Democrats lined up behind $2.8 billion in new taxes. When that measure failed, a photographer working for the Republicans took a picture of the voting board, a violation of the chamber's rules that triggered outrage among Democrats.

Amid the chaos, Rep. Herman Mihalich, D-Westmoreland, tripped or fell into a bookcase, and by some reports he then punched Rep. Dennis Leh, RBerks. At least he appeared to _ Mihalich insisted he was merely trying to regain his balance. "Aw, that wasn't a punch,'' he told reporters.

Leh recalls that he had tried to physically block Mihalich from confronting the photographer before Mihalich went after him.

"He just clipped my glasses,'' Leh says. "He took a right-hand swing at me and I more or less ducked away.''

The $13.9 billion spending plan that squeaked through on Aug. 4 included $2.85 billion in new taxes, a mixture of higher personal income and business taxes and an expanded sales tax that covered such additional items as delivered pizza, lobbying and lawn care.

The '91 deal has gone down in Capitol lore as a case of unnecessary spending being used to persuade enough lawmakers to vote for higher taxes.

"Members in the House and Senate took the position, 'Well, if we're going to raise at least a billion dollars in new revenue, I need something to go back home and justify the vote,''' recalls Vince Carocci, who was Casey's press secretary at the time. "And by the time they got finished with the justifications it was up to $3 billion.''

House Majority Whip Bill De- Weese, the majority leader in 1991, believes this year's budget will not be resolved that way.

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