Gov. Ed Rendell: Income tax hike needed
Link: Rendell calls for state income tax increase [Pittsburgh Post-Gazette]

Citing the national recession and a growing state budget deficit, the governor called for an increase in the rate to 3.57 percent for the next three years, after which it would drop back to 3.07 percent.

A news release said the increase would raise $1.5 billion, which, with other new or expanded taxes Mr. Rendell has proposed, would cover the projected 2009-10 budget deficit.

The governor said such a temporary increase has been used several times in Pennsylvania history and it has always been returned to previous levels once an economic crisis passed.

In making his proposal, the governor said he rejects the Republican Senate-passed budget plan, which would try to balance the budget with cuts rather that tax increases.

Mr. Rendell noted that he had already cut allocations in his budget proposal and proposed new or expanded taxes on tobacco and natural gas drilling.

But he said that combination was still about $1 billion short of covering the anticipated $3.2 billion shortfall.

He said he was unwilling to make all the cuts called for by Republicans, which he said would fall unfairly on education and job creation efforts.