May 27th, 2009

On Tuesday, with the predicted state budget deficit at $3.2 billion a spokeswoman for a leading House Democrat mentioned increasing Pennsylvania’s income tax as a way to help fill the deficit, reports the Pittsburgh Tribune-Review.

Raising the state’s 3.07 percent income tax by 1 percentage point would raise $3.1 billion, but it appears no politician is ready to formally propose that.

“Practically speaking, a small increase in the personal income tax would be the smartest way to resolve this crisis. Politically, it is the most difficult,” said Johnna Pro, spokeswoman for House Appropriations Chairman Dwight Evans, a Philadelphia Democrat.
Any tax increase would have to augment cutting spending, instituting more efficient government operations and using a portion of the state’s $750 million Rainy Day Fund and federal stimulus dollars, Pro said.
“The governor continues to believe that any increase in broad-based taxes should be the avenue of last resort given that even the modest, targeted revenue enhancements we’ve proposed have met stiff opposition in the Legislature,” said Chuck Ardo, Gov. Ed Rendell’s spokesman.

When asked whether Evans is ready to propose an income-tax increase, Pro said: “We’re not there yet.”
House Republicans began a boycott of legislative hearings they claimed Democrats and Rendell orchestrated to promote state spending and raise taxes.

“House Republicans will not participate in hearings to trump up reasons for a major tax increase,” said House Minority Leader Sam Smith of Punxsutawney.

He charged that Appropriations Committee hearings last week and an Education Committee hearing Tuesday were staged by Democrats to demonstrate a need for higher spending.

The GOP salvo was a prelude to the battle that will wage until a budget is in place by June 30.