Pennsylvania Governor Ed Rendell is struggling in his latest budget with the desire to spend more money while lacking tax revenue due to the economic recession. Nonetheless, the $28 billion budget for 2011 expends $200 million more than the previous year. Rendell yesterday testified before the state Senate Transportation Committee about how he intended to hit up motorists to make up much of that amount.
“If you did the increase in fees for inflation and the four cents at the pump — again, I think my idea is the best idea — but if you did that, you’ve got almost $100 million more,” Rendell testified. “If you did the InsureNet — that’s the plan with the cameras — the state would generate $75 million more.”
Rendell specifically asked committee members to index various registration and driving fees to inflation so that they would automatically increase every year without a vote. He also suggested the gas tax should rise by at least four cents, although he preferred to index the gas tax to inflation as well.
Lobbyist Wayne Pettigrew had testified on March 2 before the state House Transportation Committee about the InsureNet made system which would generate automated citations for motorists who may have missed an auto insurance premium by as little as a few hours.
“I’ll use myself as an example,” Pettigrew explained. “Let’s say my premium is due March 1st, today is March 2nd, I haven’t paid my premium. If I’m driving by a site as of 2:00 last night, that site is now going to know through the NLETS database that my insurance is unpaid today. So therefore, today, if I’m driving past that site, it’s going to show me as an uninsured vehicle… Most states there is no grace period for vehicle liability on insurance.”
The for-profit company would set up cameras across the state to monitor and track all passing motorists, automatically generating tickets for anyone whose information does not appear in the insurance database. The state would pay nothing.
“We provide all the equipment, all the direct costs, the whole thing,” Pettigrew said.
Rendell promoted a similar no-cost program to expand red light cameras throughout the state. Currently, automated ticketing machines are only legal in Philadelphia. The state Senate on July 3 voted 49-1 to allow cameras in second and third-class cities, generating an estimated $25 million in net profit for the state.
Rendell was upset that his plan to toll Interstate 80 was blocked, but he insisted tolling as many roads as possible through “public private partnerships” was essential to his overall plan. The governor was optimistic that this suite of taxes, fees and tolls could be enacted.
“Although I do think it’s not an easy political lift, I don’t think it’s quite as hard as everyone makes it out to be,” Rendell said.
[Courtesy:Thenewspaper.com]
At the same time as Rendell is proposing to loot the little guy, PA is borrowing $20 million to build shrines to John “abscam” Murtha and Arlen “magic bullet” Spector.
There needs to be an all-out revolt against this kind of behavior. I hope the good citizens of PA fight this tooth and nail, and kick this SOB out of office.
Here in Fla., the scumbags doubled the cost of driver licenses and car annual taxes.
The sheeple stayed quiet, so the politicos have figured out they can come back for additional shearings soon.
There are lots and lots of streets and bridges in terrible condition in the Philly area. I remember walking on the South Street Bridge and feeling it buckle severely every time a truck drove over it; that bridge has since been demolished. InsureNet sounds like an incredibly awful system to suck cash out of drivers, but the bottom line is, if infrastructure starts crumbling beneath the glut of vehicles, the state needs to fix these roads and bridges before they start to collapse and kill people…and there’s predictably no money to do it. Also predictably, for-profit interests are stepping up, more than happy to relieve people of their money without having any choice in the matter. Hopefully this November, we will have a choice.
FWIW Rendell has reached his term limit and is not running this fall; Republican Tom Corbett will face off against Democrat Dan Onorato in the general election. I don’t know much about either, but I would think this is a good issue for the candidates to touch upon as the election draws nearer. Unfortunately, if infrastructure conditions continue to deteriorate, both may have no choice but to increase the burden motorists carry with regards to contributing to state revenue. But allowing for-profit companies to cash in on problems the government caused in the first place is shameful. I hope at least one of the candidates is against the InsureNet scheme.
FixedItForYa below:
I would think this is a good issue for the candidates to touch upon as the election draws nearer. Unfortunately, if infrastructure conditions continue to deteriorate governments can’t maintain roads with current high tax rates and gravy train union construction contracts, both may have no choice but to increase the burden motorists carry with regards to contributing to state revenue taxes must rise without end because road maintainance, like micro-chip design, is always becoming exponentially more complex.
Right, isn’t laying down a mile of road more mechanized and less labor-cost intensive now than in decades past?
Are not many road and bridge slabs pre-fab and put into place with much greater GPS guided efficiency than when highways were first built?
I live in PA. Even though what I want to say about this criminal Rendell is true, I can’t because my post will get deleted. So…
He doesn’t even mention the looming PA teachers’ pension fund debacle which will be raising rent to the state (property taxes) by an estimated average of forty percent or more. And I had no idea that Rendell’s posse OK’d red light cameras. Can’t understand why I didn’t read about that in the Reading Eagle. ??
About the only good thing I can say right now about PA is that it’s a shall-issue state for concealed carry. But big whoop…
And joeveto3, he’s leaving this fall. His eight year reign of terror is over. That’s part of the reason why he’s doing this stuff. Not that anything will be better when the next thief-in-chief gets elected.
As a fellow Pennsylvanian, I couldn’t agree more. Fast Eddie will be gone soon, and good riddance. He never saw a tax he didn’t like.
“The state Senate on July 3 voted 49-1 to allow cameras in second and third-class cities, generating an estimated $25 million in net profit for the state.”
Sounds like it’s time to move to a 4th or 5th class city! :P
Like a lot of older states, Pennsylvania is burdened with a very complicated (and expensive) government structure. (New Jersey has the same problem.) There are boroughs, townships, towns, cities, and counties, some of which overlap, and all of which cost lots of money. The simpler governmental structure of most western states is more efficient and less expensive.
I think the automated insurance verification system is great, with the following provisos:
1. An insurer will report a person as uninsured and existing policyholder only after the company’s grace period for sending in a payment (whether publicized or not) expires.
2. The company that runs the system will compensate any motorist for his/her reasonable and necessary expenses (including legal fees) associated with correcting a citation that proves to be erroneous and will pay that motorist an additional $500 as liquidated damages for his trouble.
The problem with all of these data-driven systems, like red light cameras, speed cameras, and so on, is that the people who operate them have an incentive to operate them incorrectly and no disincentive for doing so.
Just as a f’rinstance, a few years ago, I received a photo radar ticket that was based on a photo of a car with a license plate number that appeared to be mine, but the make, model and color of the car were entirely different. A simple cross-check of the DMV records to see if the license plate number corresponded to the make and model of the car would have revealed the discrepancy.
@joeveto3.. I agree with you, give the guy the boot,but beware the next guy might be worse. Here in Ontario they just combined the provincial, and federal. purchase tax. They call it the HST
Last nights bar bill
Beer and wings special 22.95 + 2.99 HST tax= 25.94 plus a tip.
And this is the same Premier that promised no tax increase.
To be fair, the HST reduces much of the tax burden on business: that 15% is now put against the HST the business itself pays, reducing their total tax load and simplifying administration. Outside of a few items that were previously taxable either provincially or federally it didn’t change much.
And promising no tax increases is a stupid thing. Promising tax cuts (like the federal government did, right in the maw of a recession) is even more foolish. You never know what the future holds; currently Ontario faces significant budget issues and not raising taxes is like tying one arm behind your back before going into a boxing match.
It’s also the kind of behaviour that has California where it is.
I hear you psar. I’m a bit of Liberal myself, and I know taxes are for the common good. But its seems like were getting nickel and dimed to death.
You’re exactly right about being nickel-and-dimed. That’s part of the problem: few politicians will propose an outright increase to sales or income taxes, but they’ll certainly go via the back-door and introduce fees, tolls, for-pay services and so forth.
It doesn’t matter that administering such a system actually ends up costing more than a flat VAT or income tax would.
psharjinian: It’s also the kind of behaviour that has California where it is.
California has the sixth highest total tax burden in the nation. The state’s fiscal problems do not stem from a refusal to raise taxes. If anything, high taxes are driving the most productive citizens and businesses out of the state. California has a serious spending problem, not a reluctance-to-tax problem.
For that matter, New Jersey has the highest tax burden in the nation, and it is an economic basket case, too.
I didn’t say that high taxes were the solution, but a simpler tax code would cut the administrative overhead down significantly.
Take New York for example: retail sales tax rates varying by (and collected by) city, county and state. Now, compare to Ontario: one tax, collected federally, one time.
Nickel-and-diming is not a good way to run a tax regime. It’s politically expedient, but it also raises administrative costs and presents a lot of opportunity for abuse (especially when it’s collected across multiple levels of government) that you just don’t see with a flat VAT or simplified income tax.
@psarhjinian, you explanation for HST is straight out of the government’s mouth, they would be proud. The reality is that this helps big business, which didn’t really need the help. It doesn’t make a spot of difference for small and midsize businesses, beyond a few minutes of time per month (I’ve spoken with the owners about this).
The other classic argument was that businesses would pass along their savings and hire more people, creating thousands of jobs. Hah, or not. Why not just pocket whatever the save and keep going? Their is absolutely no reason to create jobs due to this, and absolutely no one to track whether it actually does. But cheers, glad we could help out the big businesses of Ontario.
P.S. We even avoided doing actually useful things with this too, like integrating tax in with all shown prices
WARNING: Segue into The Truth About Retail Sales Tax
I worked on the HST implementation for several SMBs and it benefits every level of business, from General Motors on down to my local coffee shop, and for the same reason.
Under the old system, you paid and collected GST and remitted the difference between the two (if it was positive), but you couldn’t do that with PST; you had to pay it on purchases as well as pay what you collected.
Now, as a business, you pay HST on everything you buy. You charge HST on everything you sell. You remit the difference if you’re profitable, and if you’re not, you remit nothing. The net result is you pay less tax and you spend less time dealing with it. The government gets to axe the PST auditing requirements, which is nice for larger businesses, too.
Consumers ended up paying more tax on certain items, and they pay it all, but the overall system is much better, just as the GST was a huge improvement over the Manufacturer’s Tax that it replaced. The problem is that the public is reactionary about the word “tax” and doesn’t take the time to figure out how it works.
It’s much, much better than things like toll roads and camera systems.
This applies to every business. I know it certainly loosened the purse-strings where I worked: capital expenditures are up, which is a good thing. You want to see the private sector spending money.
psar:
We here in CA have the highest sales tax and the 2nd highest income tax in the US. It’s a great way to discourage businesses to move and bring jobs, and to encourage any CA based growing businesses to expand outside the state…which is what is happening. Unless you’re a big business like Intuit and are trying to bribe your way to a higher EPS by getting the state to stop their free tax filing program.
A simpler tax code will NEVER happen. There are too many vested interests in just the opposite. I’m a fair tax fan, but I’m also ready to buy a diesel wagon with a manual transmission.
mikey:
At one point, taxes were indeed for the common good. I would challenge you to find consistent examples of this in the last 50 yrs. I know of none.
CA is looking more and more like a Greek island hell bent on increasing spending despite the economic climate.
Hey Spendell I have an Idea for you, how about you index the salaries of all non state workers to inflation, how about that? This guy needs to go before his term is up to send a message to the next guy that tries this crap.
I don’t like the privacy implications, but I support automated verification/enforcement of insurance coverage. There are way too many uninsured motorists who are able to produce an (invalid) insurance card for an officer if they’re stopped.
The company wouldn’t be offering up the equipment for free if there were not even a chance of making a hefty profit.
Private companies/corporations profiting from civil infractions should be considered illegal in all 50 states and territories!
I think the definition of “racketeering” fits this scenario. Am I wrong?
They use the illogical statement that the taxes must increase percentage-wise because demand has risen for roads, services, etc. as if the tax base has not risen also.
As population rises, so does the number of people paying into the tax coffers. And with long running productivity gains, each worker produces more and thus generates more taxes per hour.
Government has benefited from the IT revolution, so transaction costs for govt services should be going down.
How was California so prosperous in past decades without the current percentage level of taxes?
Bloated public employee pensions, general govt inefficiency plus enabling and subsidizing (thus encouraging) more anti-productive social behavior are what has changed.
Population rises, but since manufacturing jobs have been shipped overseas, the jobs people can get are in the lowest tax bracket – less net revenue. Probably why people drive without insurance, BTW. Some of this loot should be rolled into mass transit, which is cutting routes and buses in Allegheny County, likely forcing working people into driving uninsured POS’s, which (according to Steve Lang) are getting ridiculously expensive — ahh.
Going to Hell in a handbasket, I say.
Rendell might be a crook, but at least he’s not sneaky about it these days…
I love Rendell. Always vote for him, including for mayor.
I like all these initiatives, except toll roads. Gas tax increase should be more like $4 instead of 4 cents but I will take it. Better than nothing. InsureNet is an awesome idea and will certainly make life much better without all the uninsured people scamming the system at my expense. Or at least they will have to pay. Registration fees are ridiculously low in PA. I don’t mind paying extra, assuming some of the money will go to improve roads and other infrastructure. Toll roads are a bad idea and I am very glad I-80 will stay toll-free.
Perhaps starting with this tiny gas tax increase will pave the way for future increases. I am not too hopeful but you never know…
They don’t call him “Fast Eddie” Rendell for nothing! Glad I never lived in PA, but NJ wasn’t much better.
Now NJ’s coming back from the brink…hopefully PA’s next governor will take a page out of Chris Christie’s playbook…I refuse to believe the $$ for the Port Authority in Pittsburgh can’t be found by eliminating some waste and redundancy in Harrisburg.
Fast Eddie can’t leave the Governor’s mansion fast enough.
Money for the Pittsburgh Port Authority can be found by eliminating waste in…the Pittsburgh Port Authority. Its labor contracts would be a good place to start.
So much BS!
philadlj does not mention that the NEW South Street Bridge is almost built, and as FleetofWheel mentions, just like the reconstruction of the Tacony Palmyra bridge (Philly to NJ) pre fab materials are being used.
http://potholes.phila.gov/southstreetbridge
http://www.dailypennsylvanian.com/article/south-street-bridge-construction-schedule
http://www.google.com/images?q=south+street+bridge&rls=com.microsoft:en-us:IE-SearchBox&oe=&um=1&ie=UTF-8&source=univ&ei=-KJITNTEF8G78gag0-CjDg&sa=X&oi=image_result_group&ct=title&resnum=4&ved=0CCwQsAQwAw&biw=1020&bih=573
philadlj also states that “I remember walking on the South Street Bridge and feeling it buckle severely every time a truck drove over it; that bridge has since been demolished.”
The South Street Bridge is a draw bridge and there must be some lash in such a structure for obvious reasons.
ihatetrees gives us some complaints about taxes, even though taxes are lower in percent of income terms since about 1950. In addition many roads are maintained with money raised by a per unit (e.g. gallon) tax on fuel. With less miles traveled, a higher overall MPG automotive fleet, and motor fuel taxes rising slower then the rate of inflation.
http://www.portal.state.pa.us/portal/server.pt/community/liquid_fuels___fuels_tax/14434/tax_rates/592451
PA has high road costs due to many factors such as many small roads going through the state including mountain areas, many bridges due to small streams etc and quite a lot of rural areas with minimal populations yet with roads that cost the same as in more built up areas.
mikey, sorry about your 10% total sales tax. In many cities in the US we are close or the same. Here in Philly we pay 8%. But you get free health care dont you? My wife and I pay about $800/mo through our employer’s plans and the employers pick up a good part of the bill.
I agree that the use of red light and speeding cameras is a huge pita with many places for abuse. While expired insurance is less prone to abuse I strongly oppose such plans due to the creation of a surveillance infrastructure that will inevitably grow over time.
DC Bruce makes many good points. FleetofWheel confuses sales taxes based upon dollar sales and taxes such as the motor fuel tax based upon total units sold. Shaker makes some good points and observations – the more folks who ride mass transit the less clogging up my favorite roads! Budda-Boom please tell me how, exactly New Jersey is coming back from the brink? LOL drink the kool aid as your boy Christie takes over the Casino district of Atlantic City so gee, guess who awards contracts and jobs…
Tolls on 80? That’s a question for another time. Write your state reps and senators Pennsylvanians!!
http://www.pasen.gov/
http://www.legis.state.pa.us/
One of the two reasons he is known as Fast Eddie stems from his ability to get from Philly to Harrisburg in an hour at 80-90 MPH. I saw his caravan of police cars and SUVs pass me and joined in the fun.
Nothing insulates you from a ticket like following the governor on non official business going triple digits.
Eddie was a great mayor and for some reason people assumed he would be a great governor. Well, property taxes went sky high under Ed along with the budget numbers. He’s good at spending money.