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Rendell scraps plans for low-income rebates
HARRISBURG - Gov. Rendell said yesterday that he was scrapping his push to give rebates of up to $400 to low-income Pennsylvanians this year because of strong legislative resistance.
The Democratic governor said lawmakers, even members of his own party, had reservations about the idea because it did not reach enough people, particularly the middle-class.
"It is the view of almost all of the caucuses ... that unless we can broaden it to include more Pennsylvanians, that it probably doesn't make sense," Rendell said at a news conference yesterday. "And I am reluctantly convinced that they are correct."
In February, Rendell made the rebates a centerpiece of his economic stimulus package, proposed as part of the budget for the fiscal year that begins July 1.
At the time, the governor argued that low-income residents were more inclined to pump the checks back into the economy in the face of a recession.
To cover the $130 million cost of the one-time rebates, Rendell proposed dipping into the state's Rainy Day reserve account.
However, many legislators, including Republican leaders who control the Senate, questioned whether the money would actually stimulate the economy.
And, given that many who would have received the checks do not now pay state income taxes, some argued that they were not rebates at all.
"They were simply giveaways. Rebates are paying back taxpayers when they pay into the system," Senate Majority Leader Dominic Pileggi (R., Chester) said yesterday, adding that he was glad Rendell nixed the idea.
A family of four making $32,000 or less a year would have been eligible for a one-time rebate of $400 under the proposal. Roughly 475,000 low-income families would have qualified for the payment, about 12 percent of them living in Philadelphia.
Jonathan Stein, general counsel for Community Legal Services in Philadelphia, said he and other advocates for Pennsylvania's poor were disappointed by the governor's decision but laid the blame on the General Assembly.
"We are very sorry that legislators didn't see the wisdom and the humanity of this initiative," he said.
When the poor get extra money, Stein said, "they don't go off to vacation in Cancun or by stock."
"They pay their utility bills and buy groceries. They pump it right back into the local economy."
Though he has abandoned the rebates, Rendell told reporters yesterday that he planned to ask lawmakers to enact an earned-income tax credit next year, similar to one on the federal level, that would help lower-income residents.
"I'd say it's not dead, it's delayed for a year," he said of efforts to help the poor.
Contact staff writer Mario F. Cattabiani at 717-787-5990 or mcattabiani@phillynews.com.
Contact staff writer Mario F. Cattabiani at 717-787-5990 or mcattabiani@phillynews.com.
