Rendell Proposes Lowering Sales Tax, But Taxing More Items -- Like Toothpaste

Governor Ed Rendell has presented lawmakers with a $29 billion spending plan that would give more money to schools while taxing the sale of many services and goods for the first time.

Although Rendell's proposal would extend the sales tax to services and items that are currently exempt, the sales tax would be reduced from 6 percent to 4 percent.

The proposed budget would increase spending by $1.1 billion, or 4 percent, for the 2010-11 fiscal year that begins July 1, and about one-third of that increase would go to public school instruction.

Although Rendell said he isn't proposing a tax increase, some of the tax exemptions he's proposed lifting include personal hygiene items like toothpaste, as well as candy, gum and cigars.

Senate President Pro Tempore Joe Scarnati says people see through that.

"An increase is an increase," Scarnati said. "I don't think the general public can withstand it, nor can we provide it."

Rendell also said he doesn't want anything like the 101-day budget impasse of last year.

"Ladies and gentlemen," he said to the joint session of the Legislature this morning, "we can disagree on what's in the budget but let's agree today that we will get on with the budget and get it done on time for the people of Pennsylvania."

Both sides of the aisle agreed on that. The budget hasn't been passed by the Constitutional deadline of June 30 since Rendell has been in office.