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For Immediate Release
Senate Republicans
Will Study Rendell Budget Proposal Governor
proposes new taxes, eliminating sales tax exemptions Senate Republicans will carefully
study Governor Rendell's $29 billion General Fund budget request for Fiscal
Year 2010-11 and remain committed to enacting a fiscally responsible spending
plan in a timely manner while protecting the interests of Pennsylvania's
taxpayers. Senate Republicans are holding to
the same basic conservative principles they maintained during last year's
deliberations -- the budget must be balanced without a broad-based tax
increase and should be delivered on time. In particular, Senate Republicans
will consider the Governor's proposal to impose new taxes and eliminate sales
tax exemptions to create a Stimulus Transition Reserve Fund. Rendell proposes
to impose new taxes on Marcellus Shale natural gas extraction and on
"other tobacco products" – cigars and smokeless tobacco. Rendell
also proposes the elimination of the 1 percent fee granted to vendors for
collection of Pennsylvania's sales tax. Rendell's plan calls for a
decrease in Pennsylvania's sales tax from 6 percent to 4 percent but would
subject more goods and services to the tax -- eliminating 74 current
exemptions to that levy. The Governor also wants to close the "Delaware
Loophole" through combined reporting by multistate and multinational
firms of their income and expenses for tax purposes. The Governor's budget proposal
also includes a $1.15 billion (4.1 percent) increase in spending and
projected 3.2 percent increase in revenues in the upcoming fiscal year. The Governor's proposed FY 2010-11
General Fund budget includes a $354 million increase in Basic Education
Subsidies for Pennsylvania's public schools for a proposed total of $5.88
billion. Special Education funding would remain at the current level of
$1.027 billion. The proposed budget also maintains
funding for community colleges, the State System of Higher Education, and the
four State-Related universities at FY 2009-10 levels. Senate Republicans will continue
to carefully monitor revenue collections over the coming months. As of the
end of January, state revenue collections are $374.4 million below
projections for the year-to-date. The Governor is now projecting a total $525
million shortfall for the current fiscal year, which ends on June 30. The Senate's review of the budget
proposal will formally begin on February 16 with three weeks of hearings
conducted by the Senate Appropriations Committee. The state's current fiscal
year ends on June 30. Contact: Carol Milligan |
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