Where are we on the state budget?

by Ben Waxman

Published Jun 1, 2010

There is a must-read update on the state budget in today's Harrisburg Patriot-News. The story lays out where lawmakers are at this current point and what's likely to happen over the next couple of months.

The good news: There has been a lot more movement on the budget then there was at this point last year. Already, the State House has passed a version of the budget. That body is expected to vote on a revenue package for the budget sometime in the next weeks.

The House Appropriations Committee last week, by a party-line vote, approved a $330 million tax package that included a severance tax, a 30-cent-per-pack increase in the state's $1.60-a-pack cigarette tax; and a tax on smokeless and loose tobacco products. But Democratic leaders could not muster the votes within their caucus to ensure the package's passage.

However, there are going to be bumps in the road. Many Republicans have declared their opposition to raising taxes. And, if Rendell wants his proposed budget to stay intact, that could be a problem.

[The GOP's] position is the state can only afford to spend $27.5 billion next year unless there is a tax increase. House Republicans, likewise, would prefer to see budget talks start at this year's spending level.

For his part, Rendell says he is dropping one of his tax hike proposals: Expanding the sales tax to items currently exempted. But that doesn't mean the governor is completely walking away from all tax increases.

He stands firm on the need for the targeted taxes he proposed on natural gas drilling and smokeless tobacco and cigars. He is calling for the elimination of a 1 percent discount to businesses that remit sales tax collections on time, and closing a loophole that allows businesses based elsewhere to avoid paying corporate income taxes for operations in Pennsylvania.

Near the end of the story, the author predicts that education funding will be the most controversial part of the budget. This makes a lot of sense. Over the past eight years, Gov. Rendell has raised spending on education, especially early childhood education. This is his last budget and he'll want to defend his legacy. At the same time, the Republicans want to take a whack at spending ... and that's where the money is.

Published June 1, 2010