PA. Headed for Major Budget Showdown - Tax Increases or Spending Cuts?

[JPZenger]

http://www.pennlive.com/printer/printer.ssf?/base/news/124519831743290.xml&coll=1

There is a major budget showdown over the next 2 weeks. Rendell just announced he wants a temporary increase of the income tax in addition to spending cuts, while the GOP-controlled Senate wants only spending cuts to close a $3 billion budget gap. It is unlikely to be resolved by the end of the fiscal year at the end of June.

"Rendell plans to meet with his Cabinet in an emergency meeting at the Capitol today to discuss the budget and the additional $400 million to $500 million in state spending cuts he will propose to help bring what started out as a $29 billion budget plan closer into balance.

The governor also continues to favor new taxes on tobacco and natural-gas extraction, dipping into the state's $750 million "rainy day" contingency fund, and postponing a planned phaseout of the state's corporate stock and franchise tax.

At this point, Rendell lacks the votes to pass the tax increase in the House. About 20 fiscally conservative "Blue-dog Democrats" from mostly the western and southwestern parts of the state met for about an hour Tuesday to discuss other options to the governor's plan. They said Rendell will meet with the House Democratic caucus on Monday to talk about his plan. Rep. Joseph Markosek, D-Allegheny County, said, "he'll face a lot of hard questions from our members." Senate Republican leaders said the tax-increase plan doesn't have the votes to pass in the Senate."

[JPZenger]

1. Rendell has not yet listed programs for cuts

As of today, Rendell listed the departments proposed for cuts, but has not yet revealed what programs or services are involved within those departments.