HARRISBURG -- Gov. Ed Rendell last night said Pennsylvania dodged a bullet in terms of harsh cuts in federal funds and won't have to lay off an additional 1,500 state workers, as he had feared earlier in the week.

He said Pennsylvania will be getting $480 million instead of the $493 million in federal funds it had originally anticipated for each of the next two fiscal years, including the one that starts July 1.

The state will still have to make up $13 million per year, but that won't cause the severe effects that had been looming -- the 1,500 layoffs, sharp cutbacks in funds to Pitt and Penn State, cuts in funds for nursing homes and hospitals, and suspending the phaseout of a major business tax.

"I am relieved," the governor said.

The federal bill provides $8.4 billion for mass transit nationally, with about $400 million for Pennsylvania. Mr. Rendell said he thinks the ongoing Port Authority light-rail extension to the North Shore could be eligible for some of that money. It currently needs about $118 million to finish the work.

He said about $1 billion in transportation funds will go to PennDOT, which, together with mass-transit projects and water and sewer projects, could create 100,000 jobs in the state.

As for the $789 billion federal stimulus bill overall, he said, "I would give it a B-plus. I would have preferred an increase in infrastructure spending and a decrease in the tax cuts, because I don't think tax rebates have a stimulating effect. But overall, it's a good bill. It's desperately needed."

Mr. Rendell repeated what Vice President Joseph R. Biden had said Wednesday: that the bill will provide a little more than $16 billion in total relief for Pennsylvania.

Half the total will go for infrastructure improvements, Medicaid payments and other state costs, and the other half will go to citizens in the form of higher unemployment benefits, an extension of food stamp benefits and tax cuts.

In terms of "budget stabilization" money for the states, the nationwide total was whacked from $25 billion in the original House bill to $8.8 billion in the final bill. Instead of about $493 million for Pennsylvania, the state is getting about $180 million.

But a change to the federal funding formula for schools will provide $300 million that Pennsylvania can use for basic education. That will free up $300 million in state funds that Mr. Rendell wants to use to improve pre-kindergarten through grade 12 funding. Together, that means $480 million for state uses, instead of the $493 million originally sought.

As for the current fiscal year, 2008-09, which ends June 30, Mr. Rendell said the bill provides $1.1 billion in Medicaid funds. That will be combined with $1.2 billion in state spending cuts -- including nearly 1,000 layoffs -- to erase the projected $2.3 billion deficit for 2008-09.