Budget wrap-up

(Harrisburg) — Governor Rendell’s proposed 2010-11 budget would increase state spending by four percent, to 29 billion dollars.

Delivering his eighth and final budget address in the face of a still-shaky economy and a projected 525 million dollar revenue shortfall, Governor Rendell characterized this year’s spending plan as “status quo,” arguing there’s not spending left to eliminate, after last year.

Rendell said  he’s proposing level or slightly reduced spending in most departments, with notable exceptions for welfare, corrections and education – all of which would see budget increases.

During his speech Rendell urged lawmakers to pass the budget by the June 30th deadline for the first time in his administration, referencing last year’s 101-day impasse.

Top Republicans disputed the idea there’s nothing left to cut out of the budget. House Minority Leader Sam Smith:

Senate President Pro Tem Joe Scarnati agreed with the sentiment, and singled out the Department of Public Welfare, corrections and pensions funds as areas where those spending efficiencies could be identified.

The most high-profile “new” idea to come from the budget address is a proposal to reduce Pennsylvania’s sales tax from six to four percent, but widen its base by applying the levy to 74 currently exempt items, including newspapers, magazines, candy, gum and basic television bills. Rendell said the present system of loopholes doesn’t make sense.

(Note – when Rendell first floated the idea of removing exemptions last summer, his favorite example was gold bullion. Bullion is NOT on the list of 74 exemptions his administration wants to remove.)

Scarnati called the proposal a tax increase, and says it would be “dead on arrival” in the upper chamber.

Rendell said the shift would generate 531 million dollars. He wants to set that and other new revenue aside in a special fund the state couldn’t tap into until federal stimulus dollars expire in 2011. The reserve account would also include money from proposed taxes on smokeless tobacco, cigars and natural gas drilling.

The sales tax idea – lowering the rate but broadening the base – sounded pretty familiar to Berks County Republican Sam Rohrer, who’s running for governor. Rohrer has pushed a similar concept for years in the House.

Rendell also repeated his recent call for reform, urging lawmakers to pass a campaign contribution limit, and begin working on a merit selection system for judicial appointments.

About pubradiopolitics
Scott covers state government and politics for Pennsylvania's public radio stations, including WITF in Harrisburg, WHYY in Philadelphia and WDUQ in Pittsburgh.

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