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Pittsburgh-area lawmakers unsure about raising state income tax

| Monday, June 22, 2009

HARRISBURG — At least one Allegheny County lawmaker, Rep. Dan Frankel, says he is inclined to support Gov. Ed Rendell's proposed income tax increase to help erase a $3.2 billion deficit. But others remained uncertain as they anticipated hearing firsthand what the governor has in mind today.

"I tend to agree with the governor. I just don't see how we can cut our way out of this," said Frankel, a Squirrel Hill Democrat who chairs the county's delegation in the House.

"It seems to me we've got to have a revenue component so we don't destroy the safety net" of state social services, Frankel said, noting the income tax provides exemptions for low-income people and for senior citizens' retirement income.

"It's the most progressive approach, at the end of the day," he said.

Frankel is the exception among Southwestern Pennsylvania Democratic lawmakers. Many say they are undecided and want to hear Rendell's pitch today to a joint meeting of the House and Senate Democratic caucuses.

Several apparently were skittish and wouldn't talk about it. Democratic Rep. Tim Solobay of Canonsburg, for example, "doesn't have anything to say. It's too early and still in the discussion stage," said his aide, Larry Pansino.

Rendell last week announced a plan to raise $1.5 billion by raising the state income tax rate from 3.07 percent to 3.57 percent. Rendell's pitch: Declining state revenue as a result of the recession leaves the state no other choice.

"We simply cannot achieve a balanced budget without more revenue," Rendell said. A budget for 2009-10 is due by law July 1.

Rendell's proposed spending remains at $28.9 billion, the level he announced in his February budget blueprint.

"There will be a lot of hard questions asked at the meeting," said House Transportation Chairman Joe Markosek, D-Monroeville. He said he doesn't favor a tax increase "at this point" and wants more budget cuts.

Rep. Nick Kotik, D-Coraopolis, is flatly against the tax increase.

"All I know is, I'm not going to vote for it," he said.

Rep. Tony DeLuca, D-Penn Hills, said he wouldn't consider a tax increase "until we cut to the bare bone."

Republicans roundly criticized Rendell's plan, saying it's wrong to ask people to pay more when they are hurting from pay cuts and job losses.

State spending was about $20 billion when Rendell was first elected and now stands at about $29 billion, said freshman Rep. Tim Krieger, R-Delmont. "That's $9 billion in seven years. That statistic alone shows you we can cut."

Few offered specific programs to cut. Krieger suggested welfare spending.

But Sen. Wayne Fontana, D-Brookline, acknowledged reducing the Legislature's spending on itself would be a gesture to constituents that everyone is cutting back. The House and Senate have a $200 million reserve fund, which leaders say they need in case Rendell threatens to withhold their operating money during a budget impasse.

"We do need some (money) so he doesn't have that leverage over the caucuses, but we don't need $200 million," Fontana said.

"My guess is close to $100 million will be given back," said Sen. Jay Costa, of Forest Hills, ranking Democrat on the Senate Appropriations Committee.

Fontana and Costa defended legislative perks such as the lawmakers' per diem and car allowances but said they would be willing to cut back if it helped convince people the Legislature is doing the right thing with the state budget. Costa said the Legislature likely will cut its spending by 10 percent.

Costa and Fontana, who serve in the minority party in the upper chamber, say they're open to Rendell's proposed income tax increase but want to hear more from him — and cut more themselves — before they'll support it.

"I think what we have to do is a lot more line-by-line reviews of the budget, to continue to make cuts beyond what the governor's done," Costa said.

However, he said cutting too much would imperil the state's economic recovery by undermining money for education and economic development.

"I don't believe you can cut yourself out of this dilemma. The cuts would be too deep and too severe," Costa said.

Fontana said he's not sold on a tax increase.

"I'm listening to the governor. I'm listening to my constituents," he said.

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