In the end, they just couldn’t stop spending.  And spending. And spending. In the end, we’re left holding the bag for their malfeasance and hoping for an economic turn around next year that shows no signs of happening.

Even if the national economy somehow manages to veer off its collision course with disaster next year, the geniuses in Harrisburg did everything they could to make sure that Pennsylvania will not participate in any employment recovery.

The main event of the recently approved PA revenue package is an near doubling of the Capital and Franchise Tax, which was due to be phased out.  This is the tax that even tax-happy Governor Rendell knows will kill businesses and the jobs they provide.  In his own words, via The Commonwealth Foundation’s Policy Blog:

Ed Rendell: Business tax cuts are a key component of our job-creation strategy… they provide a powerful incentive for businesses to locate or expand in Pennsylvania.

Ed Rendell: But the Capital Stock and Franchise Tax still hits Pennsylvania businesses -particularly manufacturers – hard.  I am convinced that accelerating the phase out of this tax will do more to help Pennsylvania workers than any other business tax change we can afford to make at this time.

Instead of phasing it out to “help Pennsylvania workers” as Rendell said, they jacked it up.  Logic would dictate that this will do the opposite of “helping Pennsylvania workers.”

This is worse than raising business taxes across the country.  This is what Rendell and these other jackasses don’t get.  Or, based on the quotes above, used to get but don’t get any longer.  They see the feds raising business taxes and their dim little light bulbs go off and think it’s a great idea to do the same.  Then they can pat themselves on the back and say they didn’t raise taxes on “the little guy,” just those big, bad businessmen.

The ones that provide jobs to “the little guy.”

It’s a hell of a lot harder for a business to pick up and leave the country in response to an increased Federal business tax than it is for a business to pick up and leave Pennsylvania for Delaware or Ohio or Kentucky in response to an increased state business tax.  Increases in state business taxes kill jobs within that state.

They stood up and stood up and stood up for nearly 100 days past the deadline, and when they decided to grab their ankles it was for the worst possible thing to do during an economic downturn.

And, by the way, remember Barack Obama’s stimulus that was supposed to “save or create” all these millions of jobs…

Federal Stimulus Funds ($2.4 Billion)

…right into the general fund, creating a grand total of 0 jobs for Pennsylvania.

So there go Pennsylvania’s jobs.  And here goes Pennsylvania’s financial stability.

One-Time Revenue Sources:

• Rainy Day Fund: $755 million (exhausting the fund)
• Health Care Provider Retention Account: $708 million (draining the fund)
• Transfer of $100 million from “MCare Fund Supplemental” surplus.  I’m not clear how this differs from HCPRA.
• Transfer from Tobacco Endowment Fund: $150 million.

That’s it.  That’s our backup plan: Finished. And, if the economy doesn’t turn around next year, it starts all over again, even worse.  There won’t be $2.4 Billion in Federal Stimulus waiting to be co-opted.  There won’t be any more rainy day fund.  There won’t be any fund to help doctors cover medical malpractice left to raid, which is fine because by that time there will likely not be many doctors left in Pennsylvania.

And smokers, bend over or hit Google Maps for a route to the nearest smoke shop in Delaware: You just got hit with a $.25 per pack tax increase.

Like That? You'll Probably Like These.

• Dude, Where’s My Budget?
• Pennsylvania Tax Burden Up 49% Since 1999
• Pennsylvanians Prefer Budget Cuts Over Rendell’s Tax Hike
• Ed Rendell’s Approval Rating At All-Time Low
• Rendell Administration Oddly Passionate About Raising Taxes

Tagged

PA Budget, Tax Policy