Gov. Rendell and legislative leaders from three caucuses (House Republicans were not involved) announced a deal on the Pennsylvania state budget. Via PLS and Capitolwire (subscription), here are some of the details.
Spend total: $27.945 billion (this does not include paying off deficit from last fiscal year, which ended about $1.7 billion in the red).
Tax Increases ($821 million):
- Retroactively increasing and delaying the phase-out of the Capital Stock & Franchise Tax. This is a tax Gov. Rendell said was the most harmful to Pennsylvania’s economy. It is estimated to add $374 million in 2009-10 and $550.6 million to state revenue collections.
- Expansion of the sales tax to tax admission to concerts, museums, theaters, etc. Estimated to collect $100 million in tax revenue.
- Legalizing and taxing table games in casinos. Estimated (based entirely on conjecture, given the failure of slots to raise what was projected) to generate $200 million, between both the tax and license fees.
- A 25 cents per pack increase in Pennsylvania’s cigarette tax – a tax which disproportionately affect the poor, is a declining revenue source, and leads to smuggling (and will add on to the recent federal cigarette tax increase). This is to be estimated a $97 million tax increase this year and $146 million next year.
- Applying cigarette tax to small cigars: $30 million estimate
- Tax on small games of chance (e.g. Bingo): $20 million estimate
Tax Cuts ($74 million):
- Reforms to the Corporate Net Income Tax – increasing the sales factor in calculating the tax, and increasing Net Operating Loss carryforward limits – estimated to be a net reduction of $74 million.
Additional Revenue Sources ($335 million):
- Expanding leases for natural gas drilling in the Marcellus Shale formation, estimated $65 million in additional revenue, in addition to $143 million from current leases.
- Redirect of cigarette tax in HCRPA to General Fund: $171 million.
- Redirect of motor license fees (probably those charged to MCare): $44 million.
- Eliminating tobacco cessation spending: $16 million.
- Suspension of certain tax credits: $39 million. It seems as though Gov. Rendell has preserved his precious film tax credit.
One-Time Revenue Sources ($2.14 billion):
- Rainy Day Fund: $755 million (exhausting the fund)
- Health Care Provider Retention Account: $708 million (draining the fund)
- Transfer of $100 million from “MCare Fund Supplemental” surplus. I’m not clear how this differs from HCPRA.
- Accelerating due date of sales tax: $211 million (in 2010-11, acceleration of Personal Income Tax: $159 million). I’m not sure why acceleration this year won’t result in less revenue in later years.
- Transfer from Tobacco Endowment Fund: $150 million.
- Tax amnesty for deliquent taxpayers: estmate of revenue increased to $190 million.
- $25 million from liquor store profits.
- Other budget transfers: $10 million.
Federal Stimulus Funds ($2.4 Billion)