Pennsylvania Senate Republican News Brief

Governor proposes new taxes, elimination of sales tax exemptions 

Senate Republicans will carefully study Governor Rendell's $29 billion General Fund budget request for Fiscal Year 2010-11 and remain committed to enacting a fiscally responsible spending plan in a timely manner while protecting the interests of Pennsylvania's taxpayers. 

Senate Republicans are holding to the same basic conservative principles they maintained during last year's deliberations -- the budget must be balanced without a broad-based tax increase and should be delivered on time. 

The Governor's budget proposal includes a $1.15 billion (4.1 percent) increase in spending and projected 3.2 percent increase in revenues in the upcoming fiscal year. 

The Governor's plan calls for expanding the number of goods and services subject to the state sales tax – eliminating 74 exemptions – while setting the new rate at 4 percent. He also proposes eliminating the 1 percent discount employers receive for collecting the sales tax. His budget would also impose new taxes on Marcellus Shale natural gas extraction and on cigars and smokeless tobacco.  

One major concern is that the Governor's budget assumes that recent hikes in federal spending will be extended for state programs.  There is no guarantee that this $848 million in funding will be approved by Congress, putting the Commonwealth and taxpayers in a precarious position. 

Senate Republicans will continue to carefully monitor revenue collections over the coming months. As of the end of January, state revenue collections are $374.4 million below projections for the year-to-date. The Governor is now projecting a total $525 million shortfall for the current fiscal year, which ends on June 30.

- News Conference
- Senator Argall
- Senator Corman
- Senator Folmer
- Senator Mensch
- Senator Pileggi
- Senator Rafferty
- Senator Scarnati
- Senator Vance
- Senator Yaw