Saturday, September 19, 2009

Reaction to state budget deal

Gov. Ed Rendell said Friday night that there are no winners or losers in the compromise that ended Pennsylvania's 80-day-old budget impasse.

Don't believe him. There are always winners and losers in every budget agreement and this one is no exception.

If you smoke, you're going to pay more. If you support the arts in Pennsylvania, you are going to pay more. (The deal expands the state sales tax to cover tickets for concerts, museums, theaters, etc.)

If your church or nonprofit group uses bingo or other small games of chance as fundraisers, you're going to have to pay the state under a new tax inlcuded in the deal.

If you're a business owner, you're going to continue paying some of the highest business taxes in the country. And so on.

Although details are sketchy, (Rendell purposely declined to reveal many details until the rank-and-file state lawmakers are briefed next week), The Commonwealth Foundation offers some instant analysis based on what we do know.

The budget deal includes $821 million in tax increases and fails to address at least $1.7 billion in deficit spending from last years' budget, according to the Foundation.

The state's "Rainy Day Fund" will be exhausted with legislative leaders agreeing to spend the entire $775 million to balance the budget, according to the Foundation.

That's a risky move because the economy isn't getting any better and we could sitting on another huge budget deficit next summer.

Read more at the Foundation's POLICY BLOG

1 comment:

Unknown said...

This is like taking blood out of a turnip. They STILL don't get it - cut the spending!! It's not going to get any better for years to come; the legislature needs to START NOW to reduce expenditures!