Governor Calls for Income Tax Hike; Rhetoric Still Tops Negotiations
“I wish I could say that we are going to have a budget on time, but I kind of doubt that at this point.” – Speaker of the House Keith McCall, at this month’s Press Club Luncheon.

“In my 27 years, this is the worst that I have ever seen a budget,” said McCall during the Press Club luncheon while recalling one of the first budgets he was a part of as a House member in 1983. The proposed Personal Income Tax (PIT) increase was only two-tenths of a percent at that time. “I remember how tenuous it was then,” he said. “I was a freshman member, and ultimately at the end of the day did not vote for that Personal Income Tax increase.”

Despite being a no vote in the ‘80s, McCall said he favors a 0.5% three year PIT increase proposed by Governor Rendell, in part because senior citizens and almost a million households total are exempt from paying taxes on personal income. McCall’s fear is that passing on cuts balancing the deficit will harm people more in the way of increased property taxes.

Earlier this week, following a closed-door joint caucus, Governor Rendell and House and Senate Democratic leaders held a press conference to rally behind the Governor’s call for a PIT increase to balance the budget. The Governor noted that, even with the 0.5% increase, PA would have the third lowest PIT in the country. Yet many House Democrats publicly and privately have said they cannot support a PIT increase, facing re-election campaigns in 2010.

While the Governor maintains that a tax increase is necessary even to balance the Senate passed SB 850, Republicans have remained solid as a caucus in opposing tax increases to balance the budget. During an interview on PCN this week, Lt. Governor Joe Scarnati said Rendell's tax proposal and threats of government service shutdowns are "scare tactics" that "up the hype, like a nuclear doomsday is going to happen. " Scarnati emphasized that Republicans in the House and Senate still believe that "we are able to balance this budget with funding sources that we have."

House Republican Leader Sam Smith (R, Jefferson) also disagreed with Rendell’s assertion that the budget cannot be balanced without new funding sources, saying the core difference is over how much money the state actually has to spend.

“If you think that we can afford to spend 29 or 30 billion dollars, then you’re in the governor’s camp,” he said. “If you think that we should be spending something less than 28 billion, this current year’s budget, in line with our current revenue picture, then you’ve got to figure out how to trim some things out of the budget and cut the spending back.

Home