Sales tax

==Insights==
===Sales tax increase expected===
:Sunday, February 04, 2007, By Tom Barnes, Pittsburgh Post-Gazette
HARRISBURG -- State Senate Republicans and Democrats expect Gov. Ed Rendell
to call for a 1 percentage point increase in the current 6 percent state
sales tax when he unveils his 2007-08 budget proposal on Tuesday.
The sales tax in Allegheny and Philadelphia counties, which is already at 7
percent, would go to 8 percent.
Sen. Gibson Armstrong, R-Lancaster, chairman of the Senate Appropriations
Committee, said today Mr. Rendell told him about a week ago that he wanted
to increase the sales tax as a way to generate additional funds for property
tax relief and deal with other rising budget costs, such as medical
assistance for the poor.
An official on the Senate Democratic side, who asked not to be named, said
he has heard the same thing.
"I think a sales tax increase will be an extremely difficult for people on
both sides of the aisle, Mr. Armstrong said. "How do you convince the
newer legislators to put up a vote for an increase in the sales tax?'
Many of the 55 new members of the House and Senate made a no-tax-increase
pledge during their campaigns.
State Rep. David Levdansky, R-Forward, chairman of the House Finance
Committee, said he hadn't heard about the proposed sales tax increase but he
said that significant additional funds will certainly have to be raised from
some source for 2007-08.
"This is going to be an extraordinarily difficult budget year, he said,
with an additional $1.7 billion needed just for rising medical assistance
costs for the poor. Also, he said, it doesn't look like the current 2006-07
budget will produce much of a surplus, in contrast to significant surpluses
in the last two years.
An increase of 1 percentage point in the sales tax rate, if approved, would
generate an additional $1.4 billion for the state, starting July 1.
==Links==
* Taxation
category:news coverage
category:finance