Rendell seeks rebates for low-income families

February 4, 2008 7:23:22 PM PST
Gov. Ed Rendell will ask the Legislature Tuesday to approve special payments of up to $400 to nearly a half-million low-income families, hundreds of millions of dollars for business incentives and bridge rebuilding, and a substantial spending increase for public schools.

Borrowing a page from President Bush's playbook, he asked the Legislature for bipartisan cooperation on his economic-stimulus proposals and warned that the public expects quick action, not partisan fighting.

"They don't want to see us haggle, they don't want to see us call each other names," Rendell said Monday. "They want to see us act."

Overall, spending from the state's main bank account would increase by 4.2 percent, which the governor said is about the current inflation rate, boosting the state budget for the year starting July 1 to $28.3 billion. He is not proposing any broad-based tax increases, but is asking for some smaller increases.

Rendell said the budget increase is driven primarily by rising state prison populations and the growing cost of providing health care for the poor and elderly. He flatly dismissed Republican proposals to cut taxes and approve a zero-growth budget.

"The time to do a rebate for our hardest working families is now, because that will pump money into the economy, but reducing the personal income tax of a multimillionaire won't do anything" to stimulate the economy, Rendell said one day before his annual budget speech to the Legislature.

Aides said Rendell held the unusual pre-speech budget briefing because he was worried about being upstaged by election news on Super Tuesday, when two dozen states are holding presidential delegate-selection events.

Under the proposed additional aid for low-income Pennsylvanians, the state would offer one-time payments of up to $400 to about 475,000 families. The $130 million cost would be paid by the state's budget reserve, called the "rainy day" fund, and be repaid from the government's surplus after the fiscal year ends June 30.

Families who are eligible are part of the state's "Commonwealth Tax Back" program. They typically have at least one dependent and do not earn enough to pay income taxes, although the Rendell administration could not immediately provide income limits for eligibility.

While several dozen House Republicans called Monday for a budget that would stay at this year's $27.2 billion level, Rendell said his proposed increase simply keeps up with the cost of living.

Rendell also is asking for an additional $291 million for public schools, an increase of 5.9 percent to $5.2 billion. More of the money would be directed to school districts that serve a disproportionate number of poor children or children learning to speak English.

Another proposal would require property owners to pay a new 7-cent-per-$100 fee on property insurance premiums to help pay for $100 million in proposed spending on flood control projects over three years.

Rendell also wants to borrow $600 million over three years to help fix the state's crumbling bridges and inject $100 million into an existing program that gets abandoned sites ready for new businesses. The debt would be repaid with existing tax revenue.

He proposed raising the state's debt limit by $750 million to help finance civic development projects, such as parks and museums.

At a news conference Monday in Philadelphia, he also proposed putting more police officers on the streets by doubling funding for patrol grants to $20 million a year.

House Republicans rolled out their own budget proposals Monday that included income, business and electricity tax cuts and a moratorium on new state borrowing. They proposed a no-growth budget and a requirement that department heads identify inefficient operations and areas where spending could be cut.

Rep. Mike Turzai, R-Allegheny, the GOP caucus' policy chairman, said tax cuts of about $450 million a year would stimulate the state economy at a time when many are predicting recession.