Highlights of Gov. Rendell's budget plant | 6abc Philadelphia

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By 6abc

Wednesday, February 4, 2009

HARRISBURG, Pa. (AP) - February 4, 2009

THE BIG PICTURE:

SPENDING:

$9.6 billion, up 5 percent, for Public Welfare Department (aid for low-income adults, disabled and neglected children)
$5.9 billion, up 5 percent, for public school instruction and operations
$1.6 billion, up 10 percent, for Corrections Department
$942 million, up 4 percent, for debt payments
$514 million, up 9 percent, for higher education tuition aid

CUTS:

$218 million, or 35 percent less, for Community and Economic Development Department (grants and other aid to local governments, community organizations and businesses)
$38.5 million, or 13 percent less, for Health Department
$1.5 billion, or 5 percent less, for universities, colleges and community colleges

TAXES:

Increase the state cigarette tax by 10 cents a pack to $1.45. Takes effect July 1. Expected to raise $61 million.
Eliminate the transfer of cigarette tax revenue to a special fund that helps doctors and hospitals pay their medical malpractice bills. Takes effect July 1 and is expected to free up $199 million.
Levy a new tax on other tobacco products, including cigars, snuff and pipe tobacco - 36 cents an ounce for smokeless and loose tobacco and 36 cents per 10 cigars or cigarillos. Effective Oct. 1, the tax is expected to generate $38 million by the end of the fiscal year in June 2010.
Impose a new severance tax on natural gas extraction based on both the value and volume of the gas. Effective Oct. 1, it is expected to generate $107 million the first nine months it is in effect.
Eliminate a discount that allows retailers to keep 1 percent of the money they collect from the state's 6 percent sales tax if they pay the rest to the state on time. Effective July 1, this is expected to generate $75 million.

SURPLUSES:

Source: Rendell administration.