The Return of Ed Spendell

Stop me if you've heard this one before.

Gov. Ed Rendell wants to spend more of your money. He'd like Pennsylvania residents to pay more in cigarette taxes if they smoke and pay more for electricity if they use this new-fangled invention. The governor is calling it "public benefits charge," but it's a tax on electricity.

He also wants you to pay more for insurance. Rendell wants to impose a new assessment on all property-insurance policies, adding an extra $7 for each $100 you now pay in insurance premiums.

The rest of the money needed to pay for Rendell's $1.1 billion increase in General Fund spending would come from dipping into what is known as the "Rainy Day Fund" and borrowing money. Borrowing lots of money.

With the Republican-controlled state Senate unwilling to approve any new tax hikes in 2007, Rendell has decided that putting the state deeper into debt is the only way he can satisfy his enormous appetite for spending other people's money.

Rendell wants the Legislature to increase the state's debt limit by $750 million, all of which would immediately be spent on building projects. He also wants to borrow $270 million to rebuild bridges and other infrastructure. It would be the fourth time Rendell has pushed to raise the state's debt limit since he became governor in 2003.

If the budget makes it through the Legislature as Rendell has proposed, state spending in Pennsylvania would have risen by $8 billion since Rendell became governor in 2003. Rendell called the budget "tight" when he unveiled it before a joint session of the state Legislature. If $28.3 billion is tight, I'd hate to see what Rendell considers a "loose" budget.

Republicans in the state Legislature were quick to criticize Rendell's spending plan.

"Hearing the governor this morning reminded me a little of Groundhog Day," House Republican Leader Sam Smith said. "The governor stood up, saw his shadow and proposed more taxes, borrowing and spending. It's the same story, year after year."

Rep. Tom Quigley, R-Montgomery, said Rendell's budget includes too much spending.

"The governor is repeating his pattern of looking for new ways to tax the people, and while he has proposed cuts to programs that have proven successful, he has reallocated that funding for his own personal spending priorities," Quigley said. "We should be looking at a budget with no new taxes and one where money that is cut is returned to the people, not to the governor's personal spending till."

Quigley has introduced legislation to cut the state income tax.

"Faced with the very real possibility of an economic downturn, we should be seeking a legitimate economic stimulus plan, Quigley said. "Rolling back the Personal Income Tax to 2.8 percent, as I have been advocating for months, would spur families and businesses to spend more money and would strengthen the Commonwealth’s economy. We need to give the money back to those people who contribute the most to our tax rolls – middle-income families and small businesses."

Much of what Rendell wants to spend in the 2008-09 budget is familiar. Rendell wants to extend health insurance coverage to the state’s uninsured, spend $850 million on alternative energy projects and borrow $1.25 billion to pay for development projects and build medical research facilities.

And let's not forget the Rendell "economic stimulus package," a plan to send $400 in tax rebates to 475,000 lower-income families who don't pay income taxes. The one-time payments would cost the state treasury about $130 million.

Quigley said the elimination of property taxes would provide the biggest economic stimulus for Pennsylvania taxpayers.

"I would also urge the Democrat Leadership to renew the property tax debate that started last week," Quigley said. "This is the main issue that the overwhelming majority of Pennsylvanians want to see addressed. The programs and initiatives outlined in today's budget need to be worked out over the coming weeks, but the issue of school property taxes needs to be addressed immediately."

For more details on the budget, go to the governor’s budget office: http://www.budget.state.pa.us

For a no-spin look at the spending plan, try The Commonwealth Foundation Web site at www.commonwealthfoundation.org