Rendell proposes $1.1 billion in increased spending

Governor wants 4.2 percent more for Fiscal Year 2008-09

Furthering his extensive legacy of calling for increased state spending, Governor Rendell today proposed a 2008-09 state budget calling for a $1.1 billion increase in General Fund spending to a total of $28.3 billion, according to Senator Bob Regola (R-39).

            “With another 4.2 percent spending increase requested for the General Fund, Governor Rendell is certainly making an effort to continue his legacy of proposing and signing into law budgets that call for significant borrowing, tax increases and spending -- all of which must be paid for by taxpayers today and by future Pennsylvanians tomorrow,” said Senator Regola.

If the Taxpayer Protection Act, a constitutional amendment proposal introduced by Senator Regola, were in place today, it would allow a maximum increase of 3.29 percent, or nearly $900 million in more spending.

Governor Rendell also wants to spend $900 million in new money for his proposed “Protect our Progress” economic stimulus package.  As part of POP, Rendell is proposing to tap the Rainy Day Fund, use significant funds from the Motor Vehicle Fund to cover debt service, impose a new surtax on insurance companies that write flood insurance policies in Pennsylvania, and redirect money from Pennsylvania’s Tobacco Settlement Fund.

At the heart of the POP proposal, Governor Rendell wants to take $130 million from the state’s Rainy Day Fund in the current fiscal year to pay for a tax rebate of up to $400 per household for those who qualify for Special Tax Provisions for Poverty.  Many of these households already receive a total refund of their state income tax payments.  The Governor anticipates paying the refund to 475,000 households.

“Unlike the federal economic stimulus proposal, which has a much broader impact, the Governor wants to direct state tax money to a limited segment of the population and encourage them to spend it as soon as possible,” Senator Regola said.  “I question whether that is a responsible use of the tax money that we are taking out of the pockets of working families, especially when so many Pennsylvania families are struggling just to make ends meet.”

The budget proposal includes a 5.9 percent increase ($291 million) for Pennsylvania’s schools to a proposed total of $5.2 billion.  That number includes a minimum increased payment of 1.5 percent per district.  Of the $291 million increase, the Philadelphia School District stands to garner the lion’s share of that money – approximately $86 million in new money.

Other education funding increases include:  3 percent ($30 million) for special education for a total of $1.04 billion; 3.5 percent ($11.5 million) for PHEAA grants to students for a total of $397.7 million; 3 percent ($6.9 million) for Community Colleges for a total of $236.2 million; 3 percent ($14.5 million) for the State System of Higher Education for a total of $498.5 million; 2 percent ($1.5 million) for libraries for a total of $77.2 million; and, 1.5 percent for Pennsylvania’s State-Related Universities.

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Contact:  Tom Hower (717) 787-6063