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Local News

Proposed personal income tax hike not a popular concept around here

By MIKE REUTHER mreuther@sungazette.com
POSTED: June 28, 2009

Some local residents agree with Republican lawmakers that a personal income tax hike should not be used to help balance next year's state budget.

Never mind that Gov. Ed Rendell's proposal to raise the tax from 3.07 to 3.57 percent would help raise some $1.5 billion in revenues.

"I don't think it should be raised at all," said Pete Geanacopoulos of Williamsport.

Such a tax hike, he explained, goes against all good business.

The governor's $29 billion spending plan also includes a hike in the cigarette tax, new taxes on smokeless tobacco and natural gas drilling.

Geanacopoulos pointed to the state Senate Republican plan that proposes $27.3 billion in spending plan. Not only does it keep taxes steady, it cuts expenses.

"And Rendell wants to tap into the (state's) Rainy Day fund which goes against all good business. You have to have money set aside for emergencies."

Use stimulus money to help balance the budget, he said.

Karen Norseworthy of Williamsport said she was not aware of the governor's proposal, but doesn't like the thought of paying more taxes.

"I don't think it's a good idea," she said.

State Sen. E. Eugene Yaw, R-Loyalsock Township, said an increase of half a percentage point actually raises tax bills by 16.3 percent.

For a taxpayer earning $50,000 a year, that means $250 more annually.

"It makes no sense to increase spending when you are running out of money," he said. "Logically that makes no sense to me."

Yaw said the state faces an estimated $3.2 billion spending gap that only can be expected to grow.

"One of the problems the state is going to face in about a month is that we could very easily have a significant cash flow problem. The money is just not coming in."

Meanwhile, there seems to be no real negotiations with the budget.

The state House rejected the Senate Republican budget plan earlier this month.

"There's no proposal back from the House as to where they want to go," he said. "We are not going to negotiate with ourselves. We felt it was a responsible budget with no tax increases and spending decreases."

State Rep. Garth Everett, R-Muncy, said hiking taxes only exacerbates the budget problems.

Never mind the argument that state taxes have been increased during previous recessions to plug spending gaps.

He said the governor not only wants to raise taxes but increase spending beyond this year's budget.

"If we don't stop spending now, we will face bigger deficits," he said.

Everett said his constituents aren't happy about raising taxes, either.

"The comment I hear is keep fighting the good fight and hold the line. That even comes from people who are affected by the proposed cuts in either the governor's or the Senate budget."

Harry Tompkins, 56, of Williamsport suggested raising the state sales tax, rather than the personal income tax.

"I would much rather see them raise the sales tax to allow everyone to pay their fair share, rather than have the burden be put solely on the working man."

Michele Button of Susquehanna Township said she, too, is against a personal income tax hike.

"It's not something I'd like," she said.

Tomkins said the whole budget process of recent years needs corrected.

"For the last few years, it's always been drawn out too long. There has to be a better way. To go down to the last minute and lay people off who don't get paid while they (lawmakers) are arguing ...," he said.

State Rep. Rick Mirabito, D-Williamsport, was cool as well to the idea of a personal tax hike.

"I still think there's room for us to find some reductions," he said.

He referred to "non-preferred" spending items in which state money is used to fund programs at private schools such as Philadelphia College of Osteopathic Medicine and Salus University in Philadelphia.

State Rep. Matthew E. Baker, R-Wellsboro, said business leaders have predicted that an income tax hike will kill nearly 24,000 jobs statewide and create budget problems now and later.

"I am hearing from citizens that it is unfair to ask them to pick up the tab for new spending during a time in which we cannot afford the budget we currently are obligated to fund," he responded in an e-mail.

"I am hopeful that we can come together soon to pass a new state budget that reflects its economy, supports it priorities and is fair to the taxpayers in a fiscally responsible manner. Like every good household and business in Pennsylvania, state government needs to be responsible with its finances entrusted to it by the taxpayers. We should not spend money we do not have, and attempts to raise taxes upon our citizens in one of the most difficult and trying times in economic history should not be resisted."

 
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