Dear Friends,
Coffee and Conversation
This certainly has been an
interesting winter with the
amount of snow we’ve had to
endure. Fortunately, it won’t be
long before we’re seeing the
first signs of Spring.
At the state Capitol, it is
budget season. Members of
the General Assembly are just
beginning to undertake the task
of putting together a spending
plan for Fiscal Year 2010-11
amidst the continued difficult
economic conditions we are
experiencing as a state and a
country.
This will be a challenging task,
just as you and your household
face tough spending decisions.
As members of the Legislature,
we must lead by example and
be good stewards of your hard-
earned taxpayer dollars.
Governor Ed Rendell has
laid out his spending plan,
and I want to take some time
to briefly share with you some
of the terms of his proposal
and offer you opportunities to
provide feedback on these
ideas. You should know that as
the proposal currently stands, I
oppose any new taxes.
As your state representative,
I am charged with serving
my constituents and being
your voice in Harrisburg. It is
a responsibility I do not take
lightly. Because of that, we
need to have a conversation
about the budget. This
newsletter is designed to initiate
that discussion.
Here’s hoping this newsletter
finds you and your family well.
Best regards,
RepBeyer.com
In order to gather your thoughts and feedback
on the budget proposal and other legislative issues,
I have scheduled a series of legislative meetings, all
beginning at 9 a.m. Please contact my office at (610)
791-6270 to reserve your place so we have an idea of
how many people to expect at each event.
• FRIDAY, APRIL 9,
9, Fearless Fire
Company, 1221 South Front Street, Allentown.
• SATURDAY, APRIL 10,
10, Coopersburg VFW
3405, 211 E Fairmount St,
Coopersburg.
• FRIDAY, APRIL 16,16,
Mountainville Memorial
Association, 1814 S. 5th
Street, Allentown.
• SATURDAY, APRIL 17,17,
Se-Wy-Co Banquet Facility,
3621 Old Philadelphia Pike,
Bethlehem.
TOUGH TIMES - TOUGH DECISIONS
State spending must be controlled in Pennsylvania. The
Commonwealth faces a $525 million revenue shortfall in
the current fiscal year, yet the governor is still proposing
to increase state spending by more than $1.2 billion, or 4.6
percent.
This budget relies on $2.76 billion in federal stimulus
dollars to balance spending. The governor has proposed
using these funds to increase his overall spending total.
The more the state relies on stimulus funds to increase
funding today, the larger the hole it creates next year when
all existing stimulus dollars are gone. More than $850
million of these stimulus funds are awaiting Congressional
approval.
In previous budgets, the Legislature has cut programs
and expenditures to prevent a broad-based tax increase. In
tough economic times, I believe tax increases are the wrong
approach.
 Governor Rendell’s 2010-11 Proposed Bud
Total spending: $29.03 billion, made up of $26.27 billion in state dollars and $2.76 billion in
stimulus funds.
The governor is assuming $850 million in Federal welfare funds being approved and has built this
revenue into his budget proposal. If these funds are not approved, this proposal would be out of
balance by approximately $850 million.
The budget proposal is reliant on no broad-based tax increases. The major spending increases
are in basic education, public welfare, corrections and debt service.
service

*
*All Other
includes:

Dept. of Agriculture
Dept. of
Environmental
Protection
State Police
Dept. of
Community &
Economic
Development
Dept. of Health

*Other Taxes
include:

Realty/transfer
Table games
revenue
Liquor tax
Inheritance tax

Spending Growth: $27.74 billion for Fiscal Year 2009-10. The governor cut $135 million from the
2009-10 state budget to account for the revenue shortfall. These monies came from proposed cuts
to the following programs: public television, Council of the Arts, rural affairs, Commission on Crime
and Deliquency, grants to the arts, agricultural research, farm safety and more.
The 2010-11 Rendell budget would increase spending by $1.29 billion or 4.6 percent.
Revenue and Taxes: This budget increases taxes in Fiscal Year 2010-11 by $874 million and
$1.4 billion in FY 2011-12. These new taxes do not support the governor’s new spending for Fiscal
Year 2010-11.
Rendell proposes the new taxes are to be deposited into a new account called the Stimulus
Transition Reserve Fund. The fund is proposed to help manage the loss in stimulus funds and to help
Continued on page 3...

Visit my Web site at: RepBey

dget: IT’S YOUR MONEY! Proposed Tax of New Items
address the looming multi-billion dollar spike in the state’s
While keeping food, clothing, prescription
pension systems.
medications, health care services and
educational tuition exempt from state tax,
The governor’s proposed new tax increases include the governor wants to repeal the exemption
the following: on 74 items.
◆ Sales Tax Changes: This plan would lower the rate to 4
Here is a sampling of some of the
percent and expand the scope of the sales tax,
items he has proposed to tax:
removing 74 current exemptions. This would generate Accounting, auditing and bookkeeping services
$531.5 million in Fiscal Year 2010-11.
Advertising and public relations services
◆ Eliminate the Vendor Sales Tax Discount: This Air transportation
would remove a current discount on businesses that remit
sales taxes to the state in a timely manner. This would
Airline catering
generate $73.6 million in Fiscal Year 2010-11. Amusement and recreation industries
◆ Smokeless Tobacco and Cigars: Implement a new Architectural and engineering services
tax on these items – 30 percent of the product’s value – Basic television
to generate $41.6 million in Fiscal Year 2010-11. Candy and gum
◆ Severance Tax: Impose a 5 percent tax on the value of Caskets and burial vaults
natural gas at the wellhead (plus 4.7 cents per thousand Catalogs and direct mail advertising
cubic feet of gas severed). This would generate $160.7
million in Fiscal Year 2010-11.
Coal
◆ Business Tax Package: The governor wants to Coin operated food and beverage vending machines
change the way corporations report their income to Consulting services
the Commonwealth by moving to combined reporting. Custom programming, design and data processing
The package would also, among other things, reduce the Dry cleaning and laundry services
Corporate Net Income tax to 8.99 percent. His proposal
would generate $66.6 million in 2010-11.
Electric use (residential)
Electrical, plumbing, heating & AC service fees
Financial institutions fees
Welfare Costs Climb, Fraud is a Problem Firewood
Flags
I believe cuts will be necessary to control spending. Decisions will be tough Residential fuel oil and gas
but they are needed and controlled spending can be met through two avenues: Funeral parlors, crematories and death care services
• Limited growth, with increases reflecting only Gratuities
what can be afforded. Horses sold to out of state purchasers
• Cuts to existing budget expenditures.
Investment metal bullion and investment coins
Legal services
There are definite areas where waste has been documented. Auditor Liquor or malt beverage purchased from retail dispenser
General Jack Wagner has released several Department of Public Welfare
(DPW) audits that cite fraud and abuse in the department. Before another dime Magazines
in new spending is set aside for the department, it should be determined that Motor vehicles (out-of-state purchases)
the approximately $9.7 billion appropriated is being spent properly and not Museums, historical sites, zoos and parks for profit Newspapers
wasted. Non-prescription drugs
The state needs to review its Medical Assistance program within DPW.
It is the department’s largest expenditure and has grown dramatically since
Parking lots and garages
the Rendell Administration took office in 2003. About 600,000 people have Personal care services
been added to the state’s Medical Assistance rolls since 2003 – equal to Personal hygiene products
about 5 percent of the state’s population. Approximately 400,000 of these new Recreational parks, camps and campgrounds
recipients were added BEFORE the economic decline started in spring of 2008, Spectator sports admissions (excludes schools)
and 2.1 million are on Medical Assistance now.
We need to examine whether or not all of these people truly meet the
Stair lift devices
state’s Welfare eligibility requirements. An audit released by the auditor general Telephone use (residential)
in January 2009 indicated there were improper eligibility determinations for a Textbooks
significant number of Medical Assistance recipients between 2005-2008. Theater, dance, music and performing arts admissions for profit
A long hard look must be taken at existing programs to determine which Transit and ground transportation
are needed and which are not due to ineffectiveness or duplicative purpose. As
one of the state’s largest and fastest growing expenditures, the Department of
Truck transportation
Corrections costs should also be reviewed. Veterinary fees
With prison populations growing dramatically, thus driving up costs, maybe Warehouse storage
it is time to review sentencing guidelines and to start considering alternative Waste management and remediation services
punishments for non-violent and low-risk public threat offenders. Water and sewage services
yer.com
 Focus Creating Jobs is Essential
on the
Future You may have heard of the Marcellus shale natural gas reserve, the geologic
formation believed to contain as much as 500 trillion cubic feet of natural gas. In
a recent Marcellus shale land lease sale, the Commonwealth received more than
twice the revenue it expected. The governor feels the industry can bear a tax — 5
I think we need
percent of value, plus 4.7 cents per 1,000 cubic feet of gas produced — without
to address future
hurting industry growth.
financial concerns.
We need to think of
Pennsylvania businesses already have concerns over high business taxes. Adding
the future; however, another new tax to an industry that is currently on the rise may have adverse affects
differences exist on its growth. Additionally, we must be mindful of the environmental impact.
in the approach the That is not to say a severance tax should never be applied. I believe it is
governor is taking. important to allow the state to see exactly what the natural gas industry can provide
Addressing the in terms of revenue, before any tax is applied.
looming funding cliff Projections indicate this industry could help bring tens of thousands of jobs to
that will exist when Pennsylvania, and offer a surge for local economies. It is estimated that 26,000 full-
stimulus funds are and part-time jobs will be created within the next year as a result of Marcellus shale
gone is essential to exploration and extraction statewide as reported by the Pennsylvania Economy
the state budget and League. There is good news on the horizon.
its fiscal standing. Future opportunities need to be considered before a tax is enacted. An
But using more than August 2009 study authored by Penn State found that the Marcellus gas industry in
$1 billion in new
Pennsylvania generated $2.3 Billion in total value added, more than 29,000 jobs, and
taxes in the middle
$240 Million in state and local taxes during 2008.
of a recession is not
the answer.
I believe the
best way to address Your Opinion Counts
future potential
budget shortfalls is
to control spending
I have put together a brief survey of questions dealing with
and foster economic important issues. I appreciate your taking just a few minutes to
growth. We need to participate.
have an efficient If you have Internet access, please visit my web site,
government that RepBeyer.com, and click on Budget Survey. You can also
spends your money
wisely. If we work
stop by at 2851 South Pike Avenue, Suite C, Allentown, or call
together, I have (610) 791-6270. A member of my staff will be happy to help
no doubt the future you.
is bright for the The survey is simple and clear, and requires a brief amount
Commonwealth. of your time. I sincerely appreciate your making the effort to
respond.

www.RepBeyer.com • (610) 791-6270 • 2851 South Pike Avenue, Suite C, Allentown, PA 18103
Contact Rep. Beyer at:

PERMIT NO. 529

HARRISBURG, PA
PAID Harrisburg, PA 17120-2031
U.S. POSTAGE
PRSRT STD P.O. Box 202131
P.O.