Pennsylvania state budget proposals, 2009

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State Information

Main article: Pennsylvania state budget and finances

Proposed actions

Governor Ed Rendell

Gov. Rendell has proposed a $29 billion budget that increases spending on economic development and education but makes cuts elsewhere.[1] In an effort to generate more revenue for the state the governor recommended a tax on smokeless tobacco and an increase in the state cigarette tax. All of which, he estimated will generate approximately $100 million in revenue. Additionally the governor proposes using funds from the Rainy Day Fund but leaving $125 million in the fund. In terms of budget cuts the governor proposed cutting $395 million in spending by completely eliminating 20 percent of the 500 line items under the control of the Executive Branch.[2]

Even with the state's need to address the deficit and make the necessary budget cuts the governor emphasized that the state must continue to "move forward." When Gov. Rendell presented his proposed budget he said,"Even as it establishes fiscal stability, this budget moves Pennsylvania forward – and that is essential. We must enact our own economic stimulus to help companies create new jobs. We must continue to invest in increasing student achievement in our schools. We must make college more affordable to produce the next generation of leaders in the workforce. And we must provide more working adults with access to health insurance at a reasonable cost."[3]


In response to the Governor's proposed budget and the state's increasing budget gap Republican lawmakers proposed a budget that equals $27.3 billion, approximately $1.7 billion less than the Governor's budget recommendation. The proposal, also known as Senate Bill 850, includes no tax increases, but it calls for deep program cuts. For example, schools would get $1 billion less.[4] The bill was sponsored by Sen. Jake Corman. The proposal is 2.6 percent less than the current year's $28 billion budget. The proposal relies on $24.6 billion in state revenue plus $2.7 billion in federal stimulus money. Sen. Rob Wonderling said, "unlike the federal government we can't print money" for cutting what he described as "worthwhile programs and just like everybody else, the commonwealth has to tighten its belt during an economic downturn." Sen. Chuck McIlhinney added, "The alternative is jacking up the income tax or pushing the sales tax to 8 percent, and those aren't good alternatives."[5]


In an effort to reduce the state's budget deficit, Democrats are proposing raising the income tax as a solution. The proposal has not been officially submitted but lawmakers stated that the increase would be the quickest way to raise millions for services like healthcare and education. Currently the income tax is 3.07 percent. House Appropriations Committee Chair Dwight Evans said, "Do we need to make decisions that are painful? Absolutely. But we recognize that when we make cuts, we simply shift the burden to the counties, cities, school districts, churches and charities... By the same token, when the state spends money there is a ripple effect in the commmunities where we invest our dollars."[6] Raising the tax by 0.01 percent would generate about $300 million statewide for the fiscal year starting July 1, 2009, said Democratic officials.