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Governor Defends Temporary Income Tax Hike

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Jun 16, 2009 6:01 pm US/Eastern

Governor Defends Temporary Income Tax Hike

CRANBERRY TWP. (KDKA) ― With the state facing a $3.2 billion deficit, Governor Ed Rendell is proposing a temporary income tax hike.

The governor made the announcement this morning at Westinghouse Electric's new headquarters in Cranberry Township, which he says is symbolic of a good use of economic development money

The proposal would increase the state income tax from 3.07-percent to 3.57-percent over the next three years.

Rendell estimates that such a hike would amount to $5 a week for a family with an annual household income of $50,000.

"We guarantee that they will go out of existence in three years," Rendell said today. "Now why do I say three years? One because of the deficit figures that I told you for the first two years and the third year we need the tax increase and the freeze because the stimulus money goes away and we need to cushion that from happening. But by year four these tax increases would be rolled back," said Rendell.

Defending his decision to increase the tax, the governor says without such an increase, the state's budget deficit would grow to $10 billion by the year 2012.

"You say to yourself there's no more chance the Pirates will win the World Series than those taxes will roll back," Rendell added. "Well if you say that you're wrong because two times in recent Pennsylvania history we've done just that. In 1983 under Governor Thornburgh and 1991 under Governor Casey in the midst of national recessions -- not recessions anywhere near as bad as what we're facing now, they raised the personal income tax and rolled it back exactly where they promised they would roll it back to."

Rendell claims the cuts proposed by Senate Republicans to deal with the deficit without raising taxes would be too deep.

"For example, it would eliminate 800 of our 6500 state troopers, would end in-home care for thousands of seniors, terminate nursing home care for hundreds of veterans, shut down training programs for thousands of Pennsylvanians, take health care off thousands of children of working parents and close half of our pre-K programs and cut the education budget by over a billion dollars," the governor said of the Senate proposals.

The governor's proposal now heads to the Legislature where it's likely to stir a vigorous debate.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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