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Tuesday, October 07, 2008

Tax Increase Coming to Pennsylvania

State Senators Gib Armstrong and Vince Fumo are both projecting a massive budget deficit ($2.5 billion according to Fumo) and believe that the only way to pay for it is with a tax increase next year

Armstrong and Fumo - who negotiated the current budget, voted for it, urged others do so are, and are also retiring at the end of the year - added "HA HA suckers, good luck cleaning up our mess."

Amazingly, Armstrong and Fumo use two ridiculous arguments to justify increasing taxes:
1) "I don't know what else to cut": The Commonwealth Foundation has identified $6.6 Billion in programs outside the proper scope of government.
2) There is "not nearly enough time to make substantial changes" in the legislative session: That is entirely by choice - and I'm not even talking about the lame duck session, but the rest of October.  We have nearly one month before the election, but legislators are taking the next three weeks off to campaign.   There is plenty of time to restrain spending now, delaying until January means higher taxes on an already over-taxed state.


bobguzzardi said...

How are the returns on Penna. Pension accounts? SERS and PSERS must be feeling some of this paid.
If there is shortfall, does this require funding with tax dollars? setting stage for tax increase.

Nathan Benefield said...

Yes, PSERS and SERS were down on their latest report, even before the recent stock market drops.

Any loss (in fact, any gain lower than 8.5%) in these funds increases the liability for taxpayers. Typically this cost would be paid off (amortized) over 10 years, though the most recent losses were spread out over 30 years.