State+Budget+Talking+Points

=**Talking Points**=

The Governor has proposed a 16% increase in the state income tax over three years. In addition, a 212 Million Dollar cut to Schools and a 14% cut in Mental Health/Mental Retardation Services are also delineate according to an article by Tom Barnes. Pittsburgh Post-Gazette, June 18, 2009.

Our Suggestion
We recommend that the Governor, and the State Senate, increase the taxes on tobacco products, not just cigarettes. Pennsylvania is the only state that does not tax smokeless tobacco products: (cigars, pipe tobacco, chew, snuff, orbs, bidi's etc...) If the government levied stiff taxes on all of these products, there would be no need to raise the income tax, or cut the education budget. Additionally, taxing beer and liquor would avert cutting needed services to the most fragile in our population, Its time to be prudent. Decreasing needed services to youth and mentally ill persons will dramatically increase costs of incarceration, drop-outs, and violence to the community.

Here is the article from the Pittsburgh Post Gazette
HARRISBURG -- Pennsylvania's budget crisis is so severe that Gov. Ed Rendell may cut two of his favorite programs in an effort to balance the books. Mr. Rendell ordered his cabinet officials yesterday to make an additional $500 million in cuts for the fiscal 2009-10 budget and gave them a possible road map for the cuts. In reality, those cuts will be offset by an additional $400 million in welfare payments due to the poor economy. Among the possible cuts: a $22 million reduction in funds for the program Mr. Rendell created three years ago to provide computers to all high school classrooms and a $2 million cut in support for county fairs across the state. "The situation is dire," Mr. Rendell said. In February, Mr. Rendell proposed a $29 billion budget for the year starting July 1, which included some spending reductions from the current 2008-09 year. But the ongoing national recession means the state isn't getting as much tax revenue as he had projected, and the state now faces a budget deficit of $3.2 billion by June 30. The new $500 million in spending reductions will partly offset that red ink. But an increase in welfare claims is expected to result in $400 million in additional spending in the new fiscal year. So, Mr. Rendell's revised bottom line for the 2009-10 budget has dropped only to $28.9 billion, said aide Chuck Ardo. That is still much higher than the $27.3 billion alternative budget proposed by Senate Republicans, which is balanced solely by slashing state programs and has no tax increases. State officials are facing a June 30 deadline to agree on a budget, but many legislators think talks will drag on into July. The exact programs included in the new $500 million in cuts aren't known yet. The savings per department were, however, listed yesterday. "This is a tough cut for me to make," said Mr. Rendell, who created the program three years ago and said educators around the state like it. The Pennsylvania Higher Education Assistance Agency is being cut by $24 million; Probation and Parole by $3 million; Corrections by $11 million; Community and Economic Development by $43 million. Mr. Rendell also wants to reduce county fair funding by $2 million, which "pains me to make. I love county fairs." He's also suggesting cutting $3 million more from state parks and forests **//and $14 million in mental health/mental retardation funding.//** As another step in erasing the budget deficit, he wants to collect an additional $374 million by halting the phaseout of a business tax for the next three years, and by increasing the state personal income tax rate to 3.57 percent (from 3.07 percent) for the next three years. The PIT increase would raise $1.5 billion in 2009-10. Both tax measures must be approved by the Legislature, which could be a big hurdle. He will give cabinet heads until Monday to suggest revisions in which of their programs will be cut, although the bottom line of each department's reduction won't change. Harrisburg Bureau chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.First published on June 18, 2009 at 12:00 am
 * //The biggest reduction is $212 million in the Education Department//**. This could include a $22 million reduction in a program called "Classrooms for the Future," which has been supplying computers for high schools across the state.
 * //Mr. Rendell yesterday repeated his previous call for new taxes on tobacco//** and natural gas, and dipping into the state's $755 million Rainy Day emergency fund, as other ways to erase the deficit.