FOR IMMEDIATE RELEASE
April 17, 2007
Contact:
David Atkinson
(717) 787-6535

Rendell Sales Tax Hike Not Selling With Senator Armstrong

Governor Rendell's plan for a 16.7% increase in the state sales tax, with two-thirds of the money going toward increased state spending, is not picking up much apparent legislative or public support, according to Senate Appropriations Chairman Gib Armstrong.

"People are just not buying the trade Governor Rendell wants to make – raising the state sales tax a lot to provide a little bit of property tax relief.  Taxpayers have figured out most of the money would go toward new programs or more state spending on existing programs.  From what people are telling me, they do not support either of those things in the current economic climate," Armstrong stated.

The recent push from Budget Secretary Michael Masch on the higher sales tax for quicker property tax relief trade is unlikely to change the situation, because the Rendell plan is tilted against the taxpayer interest in limiting state spending.  Armstrong said the price for failing to rein in state spending this year would be additional tax increases in future years.  "We cannot afford to have state spending increase at the high rate it has in recent years.  The sales tax increase would have the unfortunate downside of enabling legislators to avoid the cutbacks needed to restore fiscal responsibility over the long run," he emphasized.

"The question frequently asked is: Why should we be forced to pay more in state taxes because gambling is not rolling out smoothly or on schedule?  While homeowners naturally want to see property tax relief dollars flowing as soon as possible, the public does not want to pay higher state taxes overall.  So even the property tax pitch they are resorting to is not enough to pull the Governor's sales tax increase plan off the shelf of the political morgue," Armstrong said.

"Those who believe it was a mistake to extend gambling, tie it to property taxes, and make aggressive promises about when the money would show up, also do not think we should make things worse by passing a big tax increase," he pointed out.

"Meanwhile, it is bitter irony for taxpayers that the Rendell Administration declared 'no property tax relief again this year' in a release on Friday the 13th," Armstrong concluded.