Highlights of Gov. Rendell's budget plant

February 4, 2009 9:50:44 AM PST
Highlights of Governor Edward G. Rendell's $29 billion budget for 2009-10 fiscal year that begins July 1, 2009:

THE BIG PICTURE:

  • $26.6 billion in taxes, fees and surpluses
  • $2.4 billion in federal stimulus money
  • No increase in income or sales taxes

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:

  • Transfer $375 million from the "rainy day" contingency fund.
  • Transfer $350 million in surplus money from the medical malpractice fund.

Source: Rendell administration.


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