STATE GOVERNMENT NEWS
STATE BUDGET - Pennsylvania general fund revenues are currently short by $374.4 million. At his mid-year budget briefing, Rendell stated that sales tax collections for the year were $230.6 million lower than the Administration had anticipated. Personal Income Tax collections were down by $163.4 million and corporation taxes were down 4.1 million. These shortfalls come only 7 months into the fiscal year.
TAX INCREASES PROPOSED - Even with this dismal economic state of Commonwealth finances Governor Rendell presented a budget for the up-coming July 1st fiscal year that includes a 4.1% increase in state spending. Rendell’s proposed budget includes a reduction of the sales tax rate from 6% to 4%, but significantly expands the tax base to include an additional 74 items previously tax-exempt. A new tax on cigars and smokeless tobacco is also part of the Rendell plan. The Governor is also counting on approximately $950 million in federal funding that hasn’t been approved by Congress. And although he was previously against it, he is now pushing for the enactment of a severance tax on natural gas production in the Marcellus Shale.
GAMBLING EXPANSION - The State Legislature narrowly voted to expand gambling at the licensed slots casino in the Commonwealth. The final bill - signed by the Governor - permits table games such as craps, blackjack etc. Proponents of the legislation claim the expansion could produce $250 million in licensing fees before the fiscal year ends.
LAME-DUCK SESSION - The State Senate recently announced that they will not convene in a “lame-duck Session” after the November General Elections this year. Senator Kim Ward has proposed a Constitutional amendment that would permanently ban these Sessions.
POLITICAL UPDATE - Get ready for some serious changes in the State Legislature this year. To date three Senators and have announced their retirements and eighteen Members of the State House have either resigned due to newly attained offices or announced that they will not seek re-election this year. On the Republican side State Attorney General Tom Corbett won the endorsement for the Governor, Jim Cawley, Bucks County Commissioner, was endorsed for Lieutenant Governor and former Congressman, Pat Toomey, was endorsed for the U.S. Senator. On the Democrat side Arlen Specter was endorse for U.S. Senator, ex-Philly City Controller Jonathan Saidel won the endorsement for Lt. Governor and no one was endorsed for Governor. Auditor General Jack Wagner won a majority, but not the required two-thirds, – in his bid for the Gubernatorial bid. Other contenders in this open primary are Allegheny County Executive, Dan Onorato and Philadelphia State Senator Anthony Hardy Williams. Last, Pennsylvania Congressman John Murtha died at the age of 77 earlier this month. A special election will be held during the May Primaries to fill this seat. Now is the time to get involved, you can no longer afford to sit on the side-lines. Call CAP for more information.
CHESAPEAKE BAY - It is expected that the New Chesapeake Bay nutrient mandates, for the largest 184 sewer plants in Central PA, will cost $1.4 billion according to a Senate-commissioned study undertaken by Representatives Metcalf and Eddy. Municipal Waste Authorities do not have access to any dedicated funding for sewer plants doing Bay upgrade projects. Upgrade projects will have to compete with all other water, sewer, storm-water, flood control and dam projects throughout the Commonwealth for infrastructure money from Acts 63 and 64 of 2008. It is assumed that most Chesapeake Bay upgrade projects will be funded through local rate increases. Further, DEP has yet to establish a viable trading program for the purchase of nutrient credits, offering no potential alleviation from these future financial burdens. As operators are clearly aware this will have a significant impact on their, already dwindling, bottom-line.
