That income tax increase was thrown into a very rushed and disorganized state budget that was approved by Senate on Dec. 23 and signed by Gov. Rendell on Dec. 28.
Pennsylvania was the last state in the entire fucking country to settle its budget. Rendell pledged to keep the Legislature in session until late Christmas Eve to handle pressing affairs.
But yeah, that money will be used for all sorts of stuff. The other half of the story was pressing for the gambling bill (and hence taxes on gambling) to replace income tax hikes.
It also funds a Trauma Center Relief program that supplements trauma centers across the state. If you haven't noticed, two level-1 trauma centers in Philly recently closed (Hahnemann and MCP) that would have been helped slightly by the relief (MCP is just all-around fucked; Tenet is closing that hospital March 31, unless the city finds a way to fund it).
Also in pushed into the budget was a 35-cents per pack increase on cigarettes. 25 cents will be used to relieve doctors from skyrocketing liability insurance costs (there's a state fund called MCARE that supplements malpractice insurance with hopes that prviate carriers will lower their rates, but that has yet to happen since MCARE started in 2001). The other 10 goes to some school education initiatives.
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