If the past is prologue to the future, the outlook for Pennsylvania's 2010-11 budget is bleak.
On Tuesday, Gov. Ed Rendell presented his budget for fiscal 2010-11. The $29.1 billion plan was the last one he will submit to the General Assembly. It calls for a 4 percent increase in spending that would be funded by $26.3 billion in taxes, fees and other state revenue as well as $2.8 billion in federal economic stimulus money.
Because the recession has dried up revenue, Rendell wants to broaden the base for the sales tax by extending it to services and certain other transactions that are currently exempt, including purchases of candy and gum, firewood, personal hygiene products and airline catering. Exemptions for groceries, clothing and prescription drugs would remain intact.
To soften the blow, the governor wants to reduce the sales-tax rate from 6 percent to 4 percent. The changes would bring in about $531 million revenue.
Rendell also wants to levy a new severance tax on natural-gas production to generate $161 million. He tried that last year, and it went nowhere. The same thing happened to another proposal the governor is resubmitting — extending the state tax on tobacco sales to cigars and smokeless tobacco, which would raise $42 million.
But if revenue isn't increased, spending must be decreased. That means even deeper cuts than were made in this year's much-delayed budget. It is hard decisions such as these that will have to be made in the coming months, and they will require lawmakers and Rendell to put aside their personal and political differences and work for the greater good of the people of Pennsylvania.
Given the last seven years, that's unlikely to happen. After all the blustering and brinksmanship, though, the alternatives will remain the same: cutting spending, raising revenue or some combination of the two. Toss in the fact that half of the senators and all of the representatives are up for re-election and the party that controls the House and Senate in 2011 will control legislative and congressional redistricting for the 2012 elections and it's a recipe for disaster.
If, after last year's budget fiasco, you thought things couldn't get any worse, think again. It's going to be brutal.
— Beaver County Times