Rep. Doug Reichley: Budget deal 'not in the best interest' of many PA residents

Rep. Doug Reichley (R-Berks/Lehigh), Republican vice chairman of the House Appropriations Committee, issued the following statement Monday following the announcement Friday of a tentative budget agreement between Gov. Ed Rendell and three of the four legislative caucuses:

"I think all Pennsylvanians welcome the end of the embarrassing spectacle of our budget impasse over these last three months. Not only are we the last state in the nation to reach a budget agreement, we were also the only state in the country where the governor was proposing to increase spending in the midst of the worst economy in 70 years. Regrettably, the agreement reached by the governor and Senate Republicans, House Democrats, and Senate Democrats is not in the best interest of the many residents of our state who are struggling with job losses and lower household incomes.

"The governor and these three caucuses have brokered a deal where many businesses will look at a retroactive increase in the Capital Stock and Franchise Tax. This 53 percent increase will then be continued over the next three years, instead of permanently phasing out the tax as was currently stated in law.

"Individual consumers will see a 25 cent increase per pack in the cigarette tax, a new tax on small cigars, a new 20 percent tax on the proceeds from small games of chance, such as raffles and punchcards, and a new sales tax on the ticket price for admission to concerts, museums, and zoos.

"In addition to these new taxes, the concocted plan calls for taking every last cent out of the $750 million Rainy Day Fund, and raiding the state medical insurance fund which is meant to protect health care providers from disastrous litigation awards. This is not a prescription for fiscal stability either this year or next year when we may be faced with similar budget shortfalls.

"What is even more troubling than the tax hike binge is the absolute lack of detail being provided to the general public. We still do not know how libraries, hospitals, service providers, and school districts will be impacted. The governor was pleased that an additional $300-plus million of state tax dollars will be invested in education as well as his other pet programs, but the question remains whether those funds will be distributed equitably or primarily used to benefit Philadelphia, as has happened in the past.

"For five months, House Republicans have proposed budget plans calling for greater reductions in spending than agreed to last week. Our plan balanced the budget without raising a single tax on businesses or individuals. Unfortunately, the governor has convinced the other caucuses to increase taxes and maintain spending at last year's $28 billion budget level.

The governor and the other three caucuses have made their deal. Now let them put up the votes to raise taxes and spending."