Senator Baker Looks to Hold Line on $2.5 Billion Tax Increase

Governor Rendell’s budget for Fiscal Year 2007-08 includes numerous proposed tax increases – including a one percent hike in Pennsylvania’s Sales and Use Tax – totaling more than $2.5 billion on an annual basis. Further, a new tax projected to cost employers $60 million FY 07-08 would cost nearly $2 billion annually after four years.

“Certainly the Governor’s budget includes things that are important to residents of the 20th District. Property tax relief, access to affordable health care and funding for our schools, roads and bridges are all issues that need to be addressed,” she said. “However, I don’t believe the Governor’s plan for more taxes, more spending, and more borrowing is the way to accomplish these goals.”

Some highlights of the proposed budget include:

  • The Governor requested a one percent increase in Pennsylvania’s sales tax, which is projected to cost Pennsylvania consumers as additional $1.24 billion in FY 07-08.
  • A new $760 million tax on oil companies to pay for mass transit in Philadelphia and Pittsburgh, a tax that will eventually be borne by consumers on heating oil bills and at the gas pump.
  • An energy use tax, based on electric usage, will cost consumers $75 million, while a $2.75 per-ton municipal waste disposal fee will take an additional $61.4 million out of Pennsylvanians’ pocketbooks.
  • The Governor also wants tobacco users to pay more. An additional 10 cents-per pack tax on cigarettes is projects to cost smokers $61 million annually, while new taxes on smokeless tobacco, loose tobacco, and cigars is estimated to cost consumers $30.3 million annually.

As she prepares for the annual budget hearings, which begin on February 26, Senator Baker said she will be examining the Governor’s proposal very closely.

“I’m willing to listen and work in a bi-partisan manner for a good budget, but what I hear continually from the people I represent is that they are already taxed too much. At the end of the day, we have to live within our means.” she said. “Fiscal responsibility is the top priority. For me, that means controlling current spending before we begin any discussion about new programs.”

 Contact: Brian Grove
bgrove@pasen.gov
(570) 675-3931