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Tuesday, February 06, 2007

Rendell budget is dead on arrival

Show of hands. How many of the 55 newly elected members of the Pennsylvania Legislature are going to support the myriad of tax increases needed to fund Gov. Ed Rendell's 2007 budget?

Rendell unveiled his $27.3 billion spending plan Tuesday for the fiscal year beginning July 1. To balance the budget, the governor will ask the Legislature to approve increasing or enacting a half-dozen different taxes.

If you're one of those 55 legislators swept into office in 2006 because your predecessor voted himself a pay raise in 2005, what are your chances of winning re-election if you vote to increase taxes? Slim and none and slim just left Harrisburg in an SUV paid by the taxpayers.

Remember that the House members, including the 50 freshmen who were sworn in Jan. 2, will face the voters again in 2008. That's next year. And half the Senate will also stand re-election in 2008.

No politician in his right mind — especially in today's political climate — wants to face voters with the weight of tax increases around their necks, especially when voters keep saying they want taxes cut — not raised.

Rendell's "raise taxes and raise taxes more" spending plan has no chance of passing the GOP-controlled state Senate.

The "climate for tax increases right now is a difficult one," Senate Majority Leader Dominic Pileggi, R-Delaware, told The Associated Press. "I think there was a stunning array of different new taxes we need to look at."

Even the lockstep Democrats in the House — with their 1-vote majority — will break from Rendell when push comes to shove. Rendell doesn't have to worry about facing the voters. He's the governor until 2010. But freshmen Democrats won't willingly end their political careers so Rendell can make a name for himself on the national scene.

Here's a quick look at Rendell's requests for tax hikes to balance his out-of-control budget and the chances any of those tax hikes will make it past the Legislature.

The governor wants to increase the state sales tax from 6 percent to 7 percent to help provide property-tax cuts, but only a portion of the money will be used to cut taxes and that will be gradual over several years. Voters want all property taxes eliminated and won't support an increase in the sales tax unless all the money goes to property tax relief. No chance of passing either chamber in the Legislature.

Rendell wants to impose a new electricity consumption tax to pay off $850 million in borrowing for alternative power development and energy conservation. No chance of passing even if Al Gore shows up to stump for the plan.

The governor wants to increase municipal solid-waste disposal fees by $2.75 per ton. Those costs will be passed on to residents. This one has no chance either.

Rendell also wants to impose a new tax on oil companies' gross profits and exempt those companies from the state's corporate net-income tax. Oil companies like making lots of money and the consumers will get hit with higher gas at the pump. Rendell also wants to tax oil companies' gross profits to raise $760 million for mass transit. Another tax that won't see the light of day.

Rendell wants to increase the cigarette tax from $1.35 to $1.45 per pack, levy a new tax on other forms of tobacco (cigars and chew) and impose a new 3 percent payroll tax on employers who do not provide employee health benefits. The cigarette tax may pass because smokers are not organized. But forget the payroll tax. The business community will balk and lawmakers will listen.

The only part of Rendell's ambitious spending agenda that may pass is leasing the Pennsylvania Turnpike. But Rendell faces opposition from his own union workers who like working for the state and will resist having to work for a private company.

If the initial reaction to Rendell's "tax and tax some more" budget is any indication, the governor is in for four unhappy years.

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