Sweet…I say get some of the deadbeats off of welfare…just the piles of shit that work the system…it is there for a reason not for people to live off it their entire life(people who have a disability are another story)
http://www.postgazette.com/pg/07036/759551-85.stm
Rendell to ask sales tax increase
Allegheny County would rise to 8 percent; property tax to fall
Monday, February 05, 2007By Tom Barnes, Post-Gazette Harrisburg Bureau
HARRISBURG – Facing “an extraordinarily difficult budget year,” Gov. Ed Rendell is expected to propose increasing the 6 percent state sales tax to 7 percent when he unveils his 2007-08 budget tomorrow.
The sales tax in Allegheny and Philadelphia counties, already at 7 percent, would go to 8 percent.
Over the course of a year, the move would raise about $1.4 billion in additional funds for the state.
Sen. Gibson Armstrong, R-Lancaster, who heads the Senate Appropriations Committee, said yesterday that Mr. Rendell recently told him that he wants to increase the sales tax. The governor would use some of the additional revenue for property tax relief for homeowners and the rest to offset other rising costs, such as medical assistance for the poor.
Two Democratic officials who asked to remain anonymous, one in the House and one in the Senate, said they’d also heard about the higher sales tax plan.
Mr. Armstrong said higher taxes will be a tough sell in the Legislature. Many of the 55 new House and Senate members ran on a no-tax-increase platform last year, he noted.
“I think a sales tax increase will be extremely difficult for people on both sides of the aisle to vote for,” Mr. Armstrong said. “I don’t think legislators from Pittsburgh and Philadelphia would be for it. Their areas would go to 8 percent.”
Sen. Jay Costa, D-Forest Hills, said, “I heard there could be something along those lines in the budget, but we need to see how the additional tax revenue would be used before considering whether to support such a measure. It’s imperative that most or all of it go for property tax relief.”
Sen. Sean Logan, D-Monroeville, said there is only one way he might support a sales tax increase – if all the additional revenue is used to lower property taxes. A citizens group called STOP, with strong ties to the Monroeville area, has been pushing for the total elimination of property taxes.
The only positive aspect to the sales tax, Mr. Armstrong said, is that people have discretion over whether they buy big-ticket items, and thus pay more tax.
But many critics said the sales tax poses a heavier burden for lower-income people.
The House Finance Committee chairman, Rep. David Levdansky, D-Forward, said money has to come from somewhere to cover rising state expenses in fiscal year 2007-08, which starts July 1.
“This is going to be an extraordinarily difficult budget year,” he said, with an additional $1.7 billion needed just for rising medical assistance and welfare spending for the poor. Another problem is that the current 2006-07 budget won’t produce much of a surplus, he said, in contrast to significant surpluses in the last two years.
Rendell press secretary Kate Philips refused to comment yesterday, but according to legislators and staff members, Mr. Rendell wants to use about half of the additional sales tax revenue, or $700 million, to reduce property taxes, with the rest going for rising state expenses, such as medical assistance for the poor.
Under a law enacted last year, $200 million from the state lottery is being used to extend rent/property tax relief to more low-income senior citizens, but middle-income homeowners haven’t gotten any property tax relief yet. Mr. Rendell thinks that up to $1 billion in relief will become available in about two years, once all 14 slot machine casinos are fully operating in the state.
House Democratic leader Bill DeWeese has previously proposed increasing the sales tax to either 6.5 percent or 7 percent, as a “tax shifting” idea to lower property taxes. The idea seemed to have some support among Democrats, who now control the House by a slim 102-101 margin.
Mr. Rendell is not expected to propose expanding the base of the sales tax by taxing items that are now tax-exempt, such as food and clothing. Some House Republicans tried to do that last year and it failed.
A higher sales tax won’t be Mr. Rendell’s only revenue-raising idea tomorrow. To expand health care coverage to the uninsured, he has already called for a higher cigarette tax and a first-time tax on cigars and smokeless tobacco.
And that’s not all. A recent transportation funding report called for the state to spend an additional $1.7 billion a year to improve state roads, bridges and mass transit. Mr. Rendell is expected to propose a series of revenue-raising options to deal with that problem – but not a further hike in the sales tax.
One of the options could be the sale or long-term lease of the Pennsylvania Turnpike, which the governor has said could fetch anywhere from $2 billion to $30 billion.
Budgeting for 2007-08 is also complicated by the ongoing phaseout of the capital stock and franchise tax on businesses, Mr. Levdansky said. That tax, now 4.9 mills on a company’s physical assets, is scheduled to drop by 1 mill this year, which will cost the state $200 million, he said.
“Without much of a surplus on June 30, plus the loss of that tax revenue and rising medical assistance costs, we are going to face a very challenging budget year,” he said.
@ Blue the economist.