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All levels of government are being affected by the economic downturn, and the Commonwealth of Pennsylvania is no exception.

After months of contentious debate, Pennsylvania is the only state that is still operating without a budget.

This delay in passage results from the Republican-controlled State Senate being at odds with Pennsylvania Governor Edward Rendell (D) over how to close the $3.2 billion budget gap, as the state constitution requires a balanced budget.

Republicans in the Senate have been pushing for cutting spending and lowering taxes, while Rendell has proposed tax increases to pay for the extra spending.

Rendell's proposal included a 16-percent increase in the personal income tax, an increase in the cigarette tax by 10 cents per pack, additional taxes on other tobacco products and natural gas production and withdrawal from the state's Rainy Day Fund.

This is the seventh consecutive year in which Pennsylvania's state budget has not been passed by the start of the new fiscal year on July 1.

The state is operating on a partial budget that pays state workers and maintains limited programs.

The City of Philadelphia passed its $3.8 billion budget in May.

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