Lawmakers find Rendell's plan taxing

February 07, 2007|by DON AINES

CHAMBERSBURG, Pa. - Pennsylvania Gov. Ed Rendell's budget proposal for next year, particularly a series a new and higher taxes, drew almost universally negative reviews from four Franklin County Republican legislators.

"It's a budget of increased taxes, increased spending and increased borrowing," state Sen. Terry Punt, R-Franklin/Adams/York, said of the proposed $27.3 billion 2007-08 budget unveiled Tuesday by Rendell.

"My sound byte is 'Tax and spend.' How better could I put it?" said state Rep. Mark Keller, R-Franklin/Perry. "If I counted correctly, there are six new taxes."

"We do not have a problem in Harrisburg with too little revenues. We have a problem in Harrisburg with too much spending," said state Rep. Rob Kauffman, R-Franklin/Cumberland.


Part of Rendell's budget address Tuesday before the General Assembly focused on transportation issues with a proposed tax on oil company gross profits to fund mass transit and a plan to lease the Pennsylvania Turnpike to pay for road and bridge projects. The Democratic governor also wants the state sales tax increased from 6 percent to 7 percent and additional taxes on tobacco products, along with a tax on employers who do not provide health-care coverage for employees.

"The governor proposed a 6.17 percent tax on oil companies to raise $760 million for mass transit," Punt said of Rendell's plan for a gross profits tax. "Those companies are just going to pass the cost on to motorists at the gas pump."

Kauffman and Keller were skeptical of Rendell's claim that the gross profits tax would not end up being reflected in the cost of a gallon of gasoline.

"I was thinking, 'How can you say that with a straight face?'" Keller said.

"This is a blanket sales tax ... to fund his proposals and also fund his failure to have gambling revenues pay for property tax reform," Kauffman said.

Revenue from slot machines will not be sufficient next year to fund property tax relief, so the governor is raising the sales tax to cover that failure, he said.

"Isn't it quite interesting that, in his remarks, he didn't refer to gambling at all," Keller said of the budget address.

"He talked about property tax reform first, and I was glad to hear it," said state Rep. Todd Rock, R-Franklin. However, he would prefer all of the $1.4 billion from a sales tax increase go to lowering property taxes instead of about half, as Rendell proposed.

Keller said he expected Rendell to raise taxes on gasoline to pay for shortfalls in mass transit systems, particularly those of Philadelphia and Pittsburgh, meaning residents in his district will be subsidizing transportation systems they do not use.

Kauffman said the idea of leasing the turnpike raises several concerns, one being the possibility of it being leased to a foreign company or foreign government, with the state losing control over fares and the quality of transportation.

"That would raise a pile of money, but I don't understand how you lease that out to someone and they make a profit," Rock said of the turnpike proposal. "Why can't we make a profit?"

"He wants to increase state spending over the current fiscal year by $1.3 billion," Punt said of the budget. "He wants to increase taxes by $2.5 billion ... and Rendell wants to increase borrowing by $2.3 billion."

"For the third year in a row, welfare is the single largest state expenditure in the budget at 35.7 percent," Keller said. At the same time, Keller said the governor is proposing a 7.7 percent cut in an area of importance to his district, agriculture.

"I've heard it loud and clear from the people of the commonwealth. They're being taxed to death," Keller said. Spending and taxes are increasing faster than wage growth, he said.

"At some point you have to learn to live within your budget," Rock said.

Staff writer Jennifer Fitch contributed to this story.

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