Pennsylvania Passes Budget, Hefty Tax Increases

Gov. Robert P. Casey on Sunday signed a $13.9-billion budget that includes the largest tax increase in state history, ending a 34-day impasse that held up paychecks for thousands of state workers.

The budget includes $2.85 billion in new taxes, including a nearly 50% increase in the personal income tax and heftier levies on business.

In Connecticut, meanwhile, minutes before a stopgap spending plan expired at midnight Sunday, Gov. Lowell P. Weicker Jr. signed an executive order keeping state government open for five days while he studies the latest budget to win legislative approval.

Earlier Sunday night, Connecticut’s House and Senate again defied Weicker by approving for a third time a budget without an income tax.

Weicker twice vetoed similar budgets, and furloughed 20,000 state workers for three days in early July. Last week he told state agencies to prepare for another shutdown today.

Elected last year as an independent, Weicker has argued that only an income tax can solve the state’s chronic fiscal problems without deeply harming its already depressed economy. Connecticut is one of 10 states without an income tax.

In Pennsylvania, Casey signed the budget but slashed $47 million from the plan that the House and Senate approved earlier Sunday. Cuts include reductions in outlays for special education, welfare and the county court system, though many of those areas still received increases over last year’s budget.

More than 100,000 state workers who had not been paid since the impasse began July 1 will be paid by next Friday, Casey said.

In Connecticut, the hastily drafted $7.6-billion budget that won legislative approval Sunday includes no income tax but would raise other taxes and fees by $740 million.

It would broadly expand the base of the state’s 8% sales tax.