He also proposed using $70 million in taxes on gas extracted from the lucrative Marcellus Shale reserve, which have yet to be approved by the legislature.
In commenting on the shortfall, Senate Majority Leader Dominic Pileggi (R., Delaware) said he would review the proposal and respond in the next few days.
Rendell controls only the state agency funding. The other funding reductions would have to be approved by the legislature, as would the gas tax - a proposal agreed upon as part of the final state budget deal signed by Rendell last month.
Pennsylvania's current budget, signed into law July 6, included receiving $850 million in federal funding. But the legislation signed into law by President Obama on Tuesday contained roughly $600 million for Pennsylvania, forcing Rendell to seek the additional cuts. That number could be reduced further because of lower-than-projected medical assistance payments, the Rendell administration said.
The governor asked legislative leaders to respond to his proposal by Monday. His chief of staff, Steve Crawford, said the governor would move forward immediately to identify agency cuts and potential layoffs.
At least 200 state workers are already expected to lose their jobs as a result of earlier budget cuts, and Crawford did not expect the number to be much higher.
A spokesman for House Majority Leader Todd Eachus (D., Luzerne) said Democrats were committed to "adequate" school funding as well as ensuring that large oil and gas companies pay their fair share through a new tax on natural gas removed from the Marcellus Shale.
"The governor gave us a menu of options for making up the projected $280 million budget shortfall, and we will examine and deliberate on those options over the next several days," Eachus spokesman Brett Marcy said.
