A wrench was thrown into Gov. Rendell’s tax-hiking plans on Tuesday when his fellow Democrats in the PA House realized they didn’t have the votes to pass his proposed $320 million in higher taxes on natural gas and tobacco products. The legislative vehicle for Rendell’s tax hikes, HB 325, was subsequently pulled from the floor and sent back to the House Appropriations Committee to settle some issues that, as Rendell put it, “need to be ironed out.”

The point of contention amongst the Democratic caucus isn’t whether taxes should go up, but rather, how to divvy up the bounty when they are done looting more money from Keystone State taxpayers and employers.

The crux of the dispute is how to allocate the more than $140 million that the proposed severance tax on natural gas is estimated to generate. Rendell and Democratic leadership are calling for most that revenue to go to state coffers, with the rest divided among local governments. Rank and file House Democrats, led by Rep. David Levdansky, are calling for an even split between state and local coffers. The remainder of the $320 million in higher taxes would come from tax hikes on tobacco products and elimination of the 1-percent vendor discount.

Yesterday, during an afternoon press conference, Rendell announced that he will resume meetings with the four legislative caucuses to try and reach and agreement. There is some speculation over the prospect of Senate Republicans coming back and passing what reporters are calling “Son of ‘850’,” a tax hike free budget similar to SB 850, which Senate Republicans put forth last year. Asked if he was concerned about Senate Republicans doing this and then pulling off enough Dems in the House to pass it – Rendell shrugged it off and made clear that such action would be met by his veto pen. Rendell wants to raise taxes and he doesn’t care if it takes all summer.

ATR would support passage of a “Son of ‘850’” and continues to urge lawmakers to craft a budget that does not include tax increases. The House is expected to take up the budget again early next week. With the budget deadline two weeks away, now is the time for Pennsylvanians to contact their representatives in Harrisburg and urge them to oppose Rendell’s irresponsible budget, which raises taxes, increases spending, and makes the state more reliant on a federal government that is $13 trillion in the red. Click here for a copy of the letter that ATR sent to Pennsylvania lawmakers last week.

ATR urges Pennsylvania taxpayers to take action today and contact thier legislators by simply clicking HERE.

Posted by Patrick Gleason on Thursday, June 17, 2010 8:33 AM EDT

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