Rendell: Layoffs, New Taxes to Fill Pa. Budget Gap

Gov. Ed Rendell is calling for tax increases to limit the number of state employee layoffs or furloughs that are likely to result from Pennsylvania's growing state budget shortfall.

Rendell says action must be taken to fill a $1 billion budget gap. His comments yesterday were spurred by news of a 12 percent shortfall in April tax collections.

He says legislators must consider imposing new taxes on cigars, smokeless tobacco and natural gas extraction.

He also advocates closing loopholes in business taxes and eliminating a 1 percent incentive for retailers that submit sales-tax money on time.

Rendell also wants the Legislature to contribute money from its reserve. He and legislators have yet to begin serious budget negotiations ahead of the July 1 start of the new fiscal year.