HARRISBURG — Gov. Ed Rendell today presented lawmakers with a $29 billion spending plan that would devote more money to schools, prisons and health care for the poor while taxing the sale of many services for the first time.
The proposal would increase spending by $1.1 billion, or about 4 percent, and relies on nearly $2.8 billion in federal stimulus money – some of which has yet to be approved by Congress – to augment state revenues amid a stubborn recession that continues to cut deeply into state tax collections.
“With help from Washington, our challenge to produce a balanced budget with no tax increase for the coming fiscal year is daunting, but doable,” Rendell said in remarks in his prepared speech.
However, he said, the state must prepare for a “fiscal tsunami” that will hit in 2011 when the federal stimulus money expires after Rendell leaves office.
To bridge that financial cliff, Rendell is proposing to reduce the state sales tax rate from 6 percent to 4 percent, but to extend it to 74 services and other transactions that are currently exempt, including candy, gum and personal hygiene products. His plan would keep intact some major exemptions, including those on groceries, clothing and prescription drugs.
He also is reviving tax increase proposals he has offered before, including a new severance tax on natural gas extraction and extending the tobacco tax to cigars and smokeless tobacco.
Rendell’s proposed budget for the fiscal year that starts July 1 is his last as governor. He is barred by law from seeking a third consecutive term.
With the state economy expected to recover slowly from the recession, next year’s spending increases also would be supported by other changes, including a speed-up in business’ remittance of the sales tax money that they collect, income from commercial drilling for natural gas on state forest land, and taxes on newly legalized table games at Pennsylvania’s casinos.
Rendell is calling for a fifth straight large increase for public schools – $355 million, or 6 percent more – a hallmark of his administration that Rendell says will ensure a better economic future for Pennsylvania.
Much of the rest of the increase in spending would go toward services for the poor and disabled, prisons to house an expanding inmate population, public-employee pensions and debt payments.
Rendell also unveiled a plan to help the state deal with the expected expiration of federal stimulus aid in 2011 and a multibillion-dollar spike in pensions costs projected to hit in 2012. The pension proposals would smooth out the expected increases in retirement expenses, possibly putting off some payments until later.
Local News
NEW – Rendell proposes lower sales tax but on more items
- Local News
-
-
Two Cambria district judge offices to be cut
Two of Cambria County’s 10 magisterial districts could be eliminated as President Judge Timothy Creany looks at realigning boundaries to cut costs while taking into consideration caseloads of the district judges and population changes.
-
Westmont couple inseparable, even in death
People who knew James and Marjorie Landis of Westmont said the two were nearly always together.
-
Company buys valuables from people ready to unload
Jan Hagerich’s buffalo nickel was “healthy” – which was unhealthy for her finances.
-
Blogging with heart
I was feeling overwhelmed yesterday, so today, I’m organizing my work. I have talked to probably a couple dozen people for Heart Month stories and I have pages and pages of notes.
-
Special Olympics return to region
More than 300 athletes eager to show off their skills, along with 135 coaches, will be coming to the region to take part in the 2012 Special Olympics Pennsylvania Winter Games.
-
Special Olympics Schedule
Here is a list of events related to the Pennsylvania Special Olympics Winter Games through Tuesday at venues across the region:
Saturday
• Laurel Highlands Polar Plunge to benefit Special Olympics; Quemahoning Reservoir near Boswell; registration at 9:30 a.m.; plunge at 1 p.m. -
Water rates going up to pay for line project
An estimated $9 million Windber Area Authority transmission line project will likely head toward construction late this summer.
-
Citizens eye cost-cutting measures
A total of 16 members of a concerned citizens group volunteered to serve on a committee to develop cost-saving ideas that will be presented to the Westmont Hilltop school board.
-
Critz co-sponsoring bills that support emergency responders
U.S. Rep. Mark Critz, D-Johnstown, said he is co-sponsoring several bills that support emergency responders.
-
IN BRIEF | Police investigating shooting of city man
State police in Indiana County are investigating the shooting of a Johnstown man late Tuesday or early Wednesday, authorities said.
- More Local News Headlines
-
Two Cambria district judge offices to be cut
Man Killed in Courthouse Shootout
Video of Ga. Man Who Killed Girl Released
Air Force Airlines: Leaders Get Polished Service
Ga Girl Fights Off Kidnapper at Walmart
Nevada Highway Patrol, City Settle Beating Case
White House Attacks Romney on Birth Control
Homs Bombardment Continues, Global Outcry Grows
Mo. Teen Gets Life Sentence for Killing Girl, 9
Lower-hassle Screening to Be Tested at Airports
Raw Video: Dog Rescued From Icy Colo. Water
Helmet Camera Captures Calif. Fire Rescue
Worker Tells 911: Powell 'exploded the House'
Triple Win: Santorum Takes Minn., Mo., Colo.
Injured Marine Inspired by Homecoming
No Rape Charges Against Son of NYPD Commissioner
Egypt's Ruling Generals Play Risky Game With US
Former Komen Exec Defends Funding Cut
Skip the Coffee Cup and Inhale Your Caffeine Fix
Calif. Gay Marriage Ban Ruled Unconstitutional
Jury Selection for Ex-UVa Athlete Enters 2nd Day
