Budget Agreement Reached: Includes Severance Tax, No Tobacco Levies.

 

(6/29/10) Budget Agreement Reached: Includes Severance Tax, No Tobacco Levies. PA Governor Rendell announced this afternoon that the legislative leaders and he agreed on a $28.05 billion budget plan for FY2010-11. The budget would increase spending by $182 million, or less than 1% from the current FY2009-10 budget. This new budget is $500 million more than Senate Republicans wanted and $1 billion less than the governor proposed.

The budget includes a severance tax on natural gas from the Marcellus Shale, with details to be worked out by October 1. It does not include an excise tax on cigars and smokeless tobacco. Nor does it eliminate the sales tax vendor discount, close the Delaware loophole, or reduce corporate income tax rates.

The FY2010-11 budget will include a severance tax on natural gas from Marcellus Shale, with details to be worked out by October 1, layoffs of 1,000 state employees, funding cuts to libraries (-9.1%, $5.5 million)

Department of Environmental Protection (-9.2%, $14.6 million), Department of Conservation and Natural Resources (-11%, $10.2 million), Department of Labor and Industry (-10%, $9.2 million), agriculture programs (-11.7%, $7.9 million), and the Executive Offices (-7.5%, $15.3 million).

The new budget relies heavily on one-time funding sources most significantly $850 million in extended FMAP funds that have not yet been approved by Congress. The Governor said that if Congress fails to approve the FMAP funding, he and legislative leaders will have to identify additional cuts in the budget.

http://www.pennbpc.org/budget-agreement-reached-includes-severance-tax-no-tobacco-levies.

(6/29/10) Pennsylvania Gov. Ed Rendell: Budget is good one but will require state worker layoffs, by Jan Murphy, The Patriot-News