Entertainment costs rise due to budget cuts
Furrah Qureshi
Issue date: 9/25/09 Section: News
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The tax increase will affect theatrical events, concerts and individual packets of cigarettes by 25 cents, The Philadelphia Inquirer reported. The tax increase will be 6 percent in the state and 8 percent in the city. The tax increase does not include tickets to sporting events or movie theaters.
In the wake of all the cutbacks, spending in education has increased by $300 million.
"With this budget we have cut spending to levels lower than last year, while maintaining programs that are critical to Pennsylvania's future, including education and economic development," speaker of the Pennsylvania House Kevin McCall said.
Drexel professor of economics Shawkat Hammoudeh expressed criticism of the plan to raise the sales tax in the city.
"Increasing the state tax from 7 percent to 8 percent will slightly increase the cost of living in the state. It will make Pennsylvania residents shop in neighboring states, and thus the expected increase in state revenue should be less than what is hoped for from this measure. The tax increase will raise the state revenue in the short run. But the timing is not appropriate. We need first to grow out of this recession into economic recovery, and tax increase should come later," Hammoudeh said.
The budget change will affect the Drexel community in a colossal way, in particularly the students because of their tight budgets, he added.
"But being young and mobile, they will be creative in finding ways to avoid part of this tax increase. Students will be affected by … certain entertainment events and venues such as museums, theaters, concerts and zoos from state taxes. Students are very involved in these cultural institutions," Hammoudeh said.
Budget negotiations left Pennsylvania as the only state without a permanent spending plan, for which the deadline was June 30, according to Bloomberg.
The statewide relief plan was announced exactly one day after legislators agreed to temporarily raise the Philadelphia sales tax. This hike will take effect beginning Oct. 8, according to KYW. City officials have also delayed some pension plan payments in hopes that these changes will compensate for a $700 million, five-year revenue shortcoming.
Due to these new changes to the Pennsylvania and Philadelphia budgets, the anticipated cutbacks from "Plan C" never had to take effect. These effects would have included the loss of nearly 3,000 city jobs and the closing of 54 library branches in Philadelphia.
"We are so excited for the city of Philadelphia. The citizens have won in a big way. I look forward to the future, the near future, when our elected officials on the city and state level stop using the library as a political football," Amy Dougherty, director of the Friends of the Free Library of Philadelphia, said.
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