Gov. Rendell wants a temporary increase in the state's personal income tax to help manage a continued decline in revenues and a projected budget deficit of $3.2 billion.
The governor made the announcement this morning at a stop outside of Pittsburgh. He said he would raise the income tax to 3.57 percent from the current 3.07 percent - a 16 percent increase - for three years. That would raise approximately $1.5 billion per year in new revenue, he said.
Rendell also said he still favors hiking the tax on tobacco and starting to tax natural gas extraction.
In 2003, his first year as governor, his administration persuaded the legislature to approve raising the income tax from 2.8 percent to 3.07 percent.
Before that, the income tax was last increased in 1991, when it went from 2.1 percent to 3.1 percent for 12 months, then dropped to 2.8 percent, according to figures provided by the administration.
Still, the governor's proposal faces a mighty battle in the legislature over the next few weeks. Republicans, including those who control the Senate, have unequivocally said they would not support it. Even some Democrats are wary of doing so, given that next year is an election year.
"We continue to believe the budget can, and should, be balanced without tax increases," said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi (R., Delaware). "It is wrong to raise taxes on hard-working Pennsylvanians when so many are being laid off, being required to work reduced hours, and worrying about how to pay their mortgage."
Rendell insists the temporary tax hike is necessary to deal with the effects of the recession and offset even steeper cuts to important state programs and funding.
"Wall Street's greed and need for instant gratification created a global economic crisis which led to giant budget deficits in almost every state in America," Rendell said in a statement. "Our families did not create this mess yet we are the ones who must clean it up. But, we shouldn't balance the budget by eliminating more job opportunities or by shortchanging our children's future with drastic cuts to public education."
The governor is expected to make a stop in Montgomery County this afternoon, and will likely discuss his proposal further.
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Rendell is going to lose his re-election bid. Maybe he's not planning to run for re-election as governor. I wonder if he's going to run for Congress instead.— CleanupPhilly- I am out here in AZ, but isn't this his second term? Someone,pleasee correct me if I am mistaken.— M.adeF.orL.oving in AZ
- Oh, he can't run for re-election, that's right. But it's unimaginable that he just end his career in politics, which is what he will do if he tries to raise taxes like the personal income tax in a high-tax state. People in Philly under the Dem plan have to pay a 1% hike in the sales tax PLUS more in the personal income tax. This is the reward we get for voting Democrats in office in PA?— CleanupPhilly
- Rendell could run for Congress even. But if he raises taxes, his future is grim in PA. He needs David Cohen (Comcast Cohen) in his camp again to look at what can honestly be cut. There's Rendell can do in Philly alone -- he only needs half a million, and there's half a million owed in overdue property taxes in Philly alone. That's something he dealt with when he was mayor, so he knows better than anyone how to structure sale of debt to collectors and the like. Rendell knows Philly has to collect $1 billion in forfeit bail. Rendell knows that the city doesn't have legal property tax assessments. Rendell knows that the BRT is still in the Philly school budget. These are fixes that will result in savings and collections of revenue that you can tally. He can the allotment to Philly schools and government by tying the money we do get to improved, modernized assessments and collections. That is what he did as mayor, and it made him governor. Why not do this as governor, and see where it takes him next?— CleanupPhilly
- Sorry meant to type "There is much that Rendell can do in Philly alone -- tying collections and assessment to any further state revenue." This will save the Democrats in the long run by fixing corrupt broken Philly government. Look what that did for the Dems in Pittsburgh. Rendell could be the new Brady.— CleanupPhilly
- Sorry meant to also type "Rendell can tie the allotment to Philly schools and to city government or programs by tying the money to benchmarks. Those benchmarks must be in collections of overdue property taxes, property tax assessments, collection of forfeit bail, etc." He put the city in a surplus in a recession, a bad one, by addressing this. As governor, he'll be lauded by all moderates of every partisan stripe, and grudgingly acknowledged by the right in PA as being a great manager, his old title. Remind us again.— CleanupPhilly
