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Governor Rendell Proposes Budget With No Tax Increase, More Money for Public Schools, Strategy for Jobs, Plan to Address Future Deficits
Date:2/9/2010

he fall of 2008.

Governor Rendell is proposing a plan to even out the skyrocketing future costs. The plan would return the systems to actuarial soundness with a "fresh start" by increasing employer contributions above the 2009-10 levels, and mitigating the 2012-13 contribution spike with a schedule of funding increases that are more incremental and predictable, much the way a homeowner would refinance a mortgage.

To cope with the anticipated loss of federal stimulus money in 2011-12 and with the long-term uncertainties of a slowly recovering national economy, Governor Rendell proposed a restructuring of several taxes to begin in September, with the extra revenue to be directed toward a Stimulus Transition Reserve Fund.  None of the additional taxpayer money raised between September 2010 and June 2011 would be used in the 2010-11 fiscal year, but would instead be set aside until at least July 2011.

  • The state Sales Tax rate would decline from six percent to four percent, but 74 items currently exempt would become subject to the tax. This would raise $531 million.

  • The Tobacco Tax would extend to cigars and smokeless tobacco, producing $41.6 million.

  • A new Natural Gas Severance Tax would raise $160.7 million.

  • Elimination of the one percent bonus that businesses receive for forwarding collected sales taxes to the state on time would produce $73.6 million.

  • A business reform tax package would generate $66.6 million. '/>"/>

SOURCE Pennsylvania Office of the Governor
Copyright©2010 PR Newswire.
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