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Rendell, in Saxonburg, outlines tax plan for education

Gov. Ed Rendell said Monday he would contemplate signing a budget without his proposed $354.8 million increase in K-12 education spending. But it depends on what lawmakers offer.

"I compromised last year," the governor said after speaking to about 100 people in the Knoch High School Library in Jefferson Township.

One compromise Rendell agreed to that helped legislators to pass this year's budget 101 days late was dropping his proposal for a half-percent increase in the state income tax.

Rendell outlined yesterday five "fair" taxes he said should be levied to help pay for more education funding, prevent future state deficits — and save state residents from paying more in other areas, such as property taxes. Pennsylvania's deficit could grow to about $5.6 billion after federal stimulus funds expire in 2011 and state and teacher pension costs spike in 2012, Rendell said.

Rendell wants to tax natural gas extraction, cigars and other smokeless tobacco. He said these are companies that currently escape levies by establishing offices in Delaware and companies that avoid paying taxes because they file their returns on time. The governor wants to lower Pennsylvania's sales tax to 4 percent from 6 percent, but expand it to many transactions currently exempt — such as dry cleaning and lawyer and accountant fees.

"It all sounds reasonable," said Roger Sepich, 18, a senior at Knoch High.

Increased spending on K-12 education would set Pennsylvania apart during a time when most states in the country are keeping such funding flat or cutting it, Rendell said.

"Hopefully, they'll work," said Helene Kujbus, 48, a special education aide at South Butler Intermediate Elementary School.

But members in the state House and Senate said new taxes are unlikely to pass.

"We have to put a responsible budget together," said Sen. Jake Corman, a Centre County Republican who chairs the Senate Appropriations Committee. "It's going to be mid-May, if not June, before we finally know where we can spend and where we have to make cuts."

Corman said the state budget's deficit is more than $700 million with more than three months to go in the fiscal year.

"Is the governor right to talk about the fact that we need to raise revenue• Yes," said Johnna Pro, spokeswoman for House Appropriations Chairman Dwight Evans, D-Philadelphia. "Is there an appetite right now to do new taxes• I'm not getting that sense."

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