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For Immediate
Release
2/6/07
CONTACT:
Governor's
Budget
Includes $2.5 Billion in Tax Hikes
Consumers Would Pay More for Retail Purchases,
Utilities, Gasoline
Senate Republicans Respond to
Governor's Budget Address
Governor Rendell's budget for Fiscal
Year 2007-08 includes proposed tax increases --
including a hike in Pennsylvania's Sales
and Use Tax from 6 percent to 7 percent --
totaling more than $2.5 billion on an annual basis.
Further, a new tax projected to cost employers $60
million in FY 07-08 would cost nearly $2 billion
annually after four years.
The budget proposal also attempts to mask a large
funding gap created after four years of following the
Governor's economic priorities. Estimates put the size
of the gap at nearly $2 billion.
"There seems to be a significant amount of tax
increases in this proposal that will dramatically
impact citizens and businesses alike," said Senate
President Pro Tempore Joe Scarnati (R-Jefferson). "I
have stated time and time again that we must be
fiscally responsible as we head into this difficult
budget cycle. At this point, we must fully examine the
proposed budget and move in a direction that is
sensible for all Pennsylvanians. I realize this is
just a beginning and look forward to working with the
Governor to bring about a sound, conservative final
budget."
The Governor requested an increase in
Pennsylvania's sales tax, from 6 percent to 7 percent
statewide. Philadelphia and Pittsburgh would see their
sales taxes increase from the current 7 percent to 8
percent, under the Governor's request, which is
projected to cost Pennsylvania consumers an additional
$1.24 billion in FY 07-08. The Governor proposes to
use more than $800 million of that money for general
state spending with the remainder being used for
property tax relief.
A proposed mass transit/oil tax is expected to cost
oil companies $760 million, a charge that would be
borne by consumers on heating oil bills and at the gas
pump. An energy use tax, based on electric usage, will
cost consumers $75 million, while a $2.75 per-ton
municipal waste disposal fee will take an additional
$61.4 million out of Pennsylvanians' pocketbooks.
The Governor also wants tobacco users to pay more. An
additional 10 cents-per pack tax on cigarettes is
projected to cost smokers $61 million annually, while
new taxes on smokeless tobacco, loose tobacco, and
cigars is estimated to cost consumers $30.3 million
annually.
"We share the Governor's goals of affordable health
care, addressing transportation needs and energy
independence," said Senate Majority Leader Dominic
Pileggi (R-Delaware). "But the costs are stunning. Can
we afford these proposals? Over the coming months, we
will use committee hearings to thoroughly examine them
so the public can fully understand the pros and the
cons."
Senator Gibson Armstrong, (R-Lancaster), Chairman of
the Senate Appropriations Committee, said he
anticipates that the tax increases will be scrutinized
during the annual budget hearings set to begin on
February 26.
"With public opinion strongly against tax hikes of any
kind for any reason, it is surprising to see a plan
offered that contains seven tax hikes, adding up to
$2.5 billion. It is difficult to see a lot of
legislative support for the extensive and expensive
tax hikes the Governor is proposing," Senator
Armstrong said. "There is a chart in my office that
shows the word 'NO' in fifty different languages. We
may have to use every variation before this budget
process is over."
Senate
Republicans Respond to Governor's Budget Address
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