'Man up,' Rendell tells state lawmakers

| Wednesday, June 9, 2010

Gov. Ed Rendell on Tuesday told state lawmakers to "man up" and vote for tax and fee increases he proposed to plug about $1.7 billion in upcoming budget deficits.

Politicians' worries about losing their jobs over a tax increase are overblown, Rendell said during a visit to Pittsburgh. He spoke Downtown at the kick-off of a statewide tour aimed at persuading tax delinquents to pay up by a June 18 tax amnesty deadline. The 54-day amnesty program eliminates penalties and half of the interest charged on back taxes.

The amnesty program, created to boost flagging revenue, enticed 37,500 delinquents to pay $101 million so far, with a goal of $190 million. Those who don't pay will face stepped-up enforcement and another 5 percent in penalties. The state will post their names on its website. The state spent more than $3 million to advertise the program.

Department of Revenue records show about $2.1 billion in back taxes dating to the 1920s, said spokeswoman Stephanie Weyant. State law bars the department from writing off delinquent accounts even if someone dies or a delinquent company goes out of business, she said.

But even if the state hits the $190 million goal, it won't be nearly enough to solve budget problems, which is why Rendell pitched new taxes on natural gas extraction and cigars and smokeless tobacco. He wants to eliminate a loophole that gives companies a 1 percent discount for remitting sales tax to the state early, since computers have reduced a once-tedious accounting task to a few keystrokes and wire transfer.

Together, these changes would generate more than $300 million to cut into the projected $1.3 billion deficit next year, Rendell said. Another $320 million could come from increasing vehicle registration and driver's license fees to keep up with inflation, he said. That money would help make up for $417 million in transportation funding the state hoped to generate by placing tolls on Interstate 80, an idea the federal government rejected.

"Not one incumbent who voted for (the 2003 income tax hike) lost," Rendell said. When he ran for re-election three years later, "I was elected by a margin of almost 22 percent, probably the largest (margin) in modern history in Pennsylvania. So, man up."

As the June 30 budget deadline draws closer, the political caucuses remain in disagreement over Rendell's proposals, according to spokespeople. House Democrats say the state needs more money. Senate Republicans remain cool to Rendell's proposals. House GOP leaders are willing to discuss registration and license fee increases but oppose non-transportation-related taxes.

"To liberals, supporting higher taxes and taking more money out of the people's pockets seems to be a badge of courage," said House Republican spokesman Stephen Miskin. "In reality, tough decisions come with living within your means like every family does, paying with money you actually have like every family does."

Dozens of anti-tax protesters visited Capitol offices yesterday -- another sign of the anti-incumbent mood every House member and half the state's senators will face in November's election. Thomas Altman, 59, an investor from Hempfield who founded Pennsylvania Freedom Allies, stopped by the office of Rep. James Roebuck, D-Philadelphia, after the statehouse rally.

"We need him to protect us from the governor," Altman told Roebuck's secretary.

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