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State of the Budget July 2, 2008
Governor Rendell and state legislative leaders agreed on the framework for a state budget agreement on the evening of June 28. According to news accounts, the 2009-10 fiscal plan will reduce the Governor's February request by somewhere around $130 million through a 1.3% across the board cut in the proposed budget for most programs. Programs that had expected increases will see the increases diminish, while flat funded programs will see a real cut from 2007-08 levels.
The sharp about face came in response to June revenue numbers, which came in $159 million below estimate. On July 1, the Revenue Department reported $27.9 billion in total revenue for Fiscal Year 2007-2008, leaving the state with a year end surplus of $159.4 million, far less than the $433 million surplus projected in February.
Historic Education and Health Care Reforms Remain Bargaining Chips in Budget Negotiations
The calendar is closing in on June 30, the end of the 2007-08 fiscal year with legislators and the Governor furiously trying to reach agreement on a spending plan for 2008-09. PBPC surveys the situation in a new Budget Watch.
Budget Number Details
PBPC has prepared a table summarzing in detail PA House and Senate changes to the Governor's proposed 2008-09 budget
SENATE ECONOMIC STIMULUS PACKAGE: The Wrong Solution for Pennsylvania's Economy
In the context of a slowing economy, the Governor's budget address in February proposed an economic stimulus plan that included increased infrastructure investments and tax rebates to low-income families. On June 11, the Senate (in SB2) passed a bill that provides some funds for infrastructure, but has not acted on the rebates, which failed to generate significant political support despite growing need.
PA House Earned Income Tax Credit Bill Turns into Tax Cut Frenzy
Combined Cost of "Christmas Tree" Full of Tax Cuts Rises to Estimated $3.8 billion
On Wednesday, January 16, the Pennsylvania House of Representatives took up legislation sponsored by Representative Dwight Evans to establish a refundable state earned income credit (EIC). Set at 15% of the federal EIC in the first year and 30% in year two and beyond, the bill would provide targeted tax relief to working families with annual incomes up to $35,000. The House Appropriations Committee estimates the legislation would cost $25 million in year one and $250 million in year two.
PBPC Details Cost Estimates of Amendments to House Bill 377
On January 17, 2008, the Pennsylvania House passed a variety of admendments to House Bill 377 which will have a significant impact on state government revenues over the next few years. PBPC has produced a table detailing the costs associated with the various amendments that can be downloaded in PDF format.
How Would a 30% PA Earned Income Credit Help Low-Income Families?
PBPC has calculated how low-income families would be helped by the 30% Earned Income Credit (EIC) that would be created by House Bill 377 by PA House district.
