HARRISBURG – Early Monday morning, Governor Edward Rendell announced that he and legislative leaders have reached a budget agreement. Because of the agreement, the Governor said state employees will not be furloughed on Tuesday.

The legislature must still act on the agreement, by tonight's midnight deadline.

“Because of the tremendous cooperative effort with the leaders of all four caucuses, I’m proud to announce an agreement that will make significant investments for the people of Pennsylvania,” the Governor said.

“This is a good budget in a tough year,” the Governor said. “It will help to create thousands of jobs that can’t be outsourced and it will invest in innovative programs that will help us break free from our dependence on foreign sources of oil.”

The Governor said his education budget continues the progress Pennsylvania has made over the past five years, with historical investments in education funding.

The Governor said the budget agreement also includes:

• $650 million for an Energy Independence Strategy that will help Pennsylvania consumers and companies lower their energy costs and expand renewable energy sources;
• $350 million to repair more than 400 of the state’s worst bridges, plus $15 million for airports and rail;
• $1.2 billion for water and sewer infrastructure improvements;
• $800 million in redevelopment capital assistance.

The Governor said the budget agreement does not increase taxes, is $545 million less than the $28.3 billion spending plan he introduced in February, and is only 3.8 percent more than the 2007-08 budget.

Regarding the $545 million that was cut from the budget during negotiations, the Governor said the budget forced some tough decisions. Some areas of the budget will receive less funding than anticipated. However, compared to other states that are in worse financial condition, the reductions will be comparatively minor.

“While I have not yet signed the budget, the agreement sets the stage for final approval once the General Assembly votes on the spending plan. As such, state employees will awaken later this morning to news that they will continue working this week, and every day, as they always have.”