Stalemate Over, Rendell Signs Budget - NBC 10 Philadelphia

Stalemate Over, Rendell Signs Budget

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    Stalemate Over, Rendell Signs Budget
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    Pennsylvania Gov. Ed Rendell has signed the key pieces of legislation necessary to end a 101-day state budget stalemate, the longest in the nation this year.

    A spokeswoman for the governor says Rendell signed the bills Friday night after the state Legislature held a flurry of votes on the $27.8 billion budget's primary appropriations bill and a key companion bill.

    The budget agreement cuts spending by more than 1 percent to help resolve Pennsylvania's multibillion-dollar, recession-driven shortfall.

    The companion bill taps more than $1.5 billion from the state's reserves.

    However, approval of nearly $700 million in discretionary funding for universities and other institutions is being held up in the House. Lawmakers must settle disagreements on a bill to legalize and tax table games at slot-machine casinos. Table games are expected to produce $200 million in taxes and fees for the state treasury.

     

    Highlights of the 2009-10 spending plan signed by Gov. Ed Rendell

          
    THE BIG PICTURE:

    -$27.8 billion in overall spending (includes $700 million in
    discretionary funds held up in House)

    -Relies on taxes, fees, federal stimulus money and surpluses

    -Cuts overall spending by 1.8 percent from last year's expected
    final spending of $28.32 billion

    -Maintains current state tax rates on personal income and sales

    -Relies on an estimated $200 million in fees and taxes from legalizing table games at slot-machine casinos

    -Relies an estimated $60 million from anticipated leasing of
    state forest land for natural gas exploration

          
    SPENDING:

    -Boosts spending on public school operations and instruction by nearly $299 million, or 5.7 percent

    -Cuts Department of Community and Economic Development by 11 percent to $707.9 million

    -Cuts Department of Environmental Protection by nearly 27
    percent to $159 million

    -Boosts Department of Corrections by 11 percent to $1.8 billion

    -Cuts Department of Public Welfare by nearly 1 percent to $10.5
    billion

    TAXES:

    -Increases the state tax on cigarette sales by 25 cents a pack, to $1.60, to raise $97 million

    -Imposes a new sales tax on ``little cigars'' at the same rate as cigarettes to raise $16 million

    -Raises the capital stock and franchise tax that some businesses pay from 1.89 mills to 2.89 mills to raise $374 million

    -Imposes a new 5.9 percent gross receipts tax on some managed care organizations to raise $316 million, replacing an expiring assessment

    -Redirects 2 percent of slot-machine gambling revenues into the state's general fund for four years; the money currently benefits Pennsylvania's race horse industry

    -Transfers revenue generated by an existing 25-cent portion of the state cigarette tax from a special fund that helps doctors and hospitals buy medical malpractice insurance coverage to raise $171 million
          
          
    SURPLUSES:

    -Transfers $755 million from the ``rainy day'' contingency fund

    -Transfers $808 million from medical malpractice insurance
    coverage funds
           _ Transfers $143 million from the Oil & Gas Lease Fund
           _ Transfers $150 million from the Tobacco Endowment account
           _ Transfers $44 million from an automobile insurance fund
          

    ONE-TIME REVENUE ITEMS:

    -Accelerates the deadline for sales tax collections to raise $217 million in 2009-10

    -Accelerates the deadline for income tax collections to raise $159 million in 2010-11

    -Generates an estimated $190 million from a program that allows the repayment of back taxes without the penalty fees or half of the interest payments that normally apply

    CONSIDERED, BUT DISCARDED:

    -Imposing a new severance tax on natural gas extraction based
    on both the value and volume of the gas

    -Legalizing and taxing video poker terminals in restaurants and
    bars

    -Imposing a new sales tax on the price of admission to live stage performances, museums, zoos and parks

    -Raising the state personal income tax by 16.3 percent for three years

    -Imposing a new excise tax on sales of loose tobacco and chewing tobacco

    -Raising the weekly limits on small games of chance fundraisers
    and imposing a 20 percent tax on ticket sales