House Republican Leader Sam Smith is warning that Gov. Ed Rendell is working on another sneaky tax increase as the state's budget crisis enters its ninth week.

Smith issued the following statement regarding the Sales and Use Tax expansion proposal being offered by the governor as a means to fund his bloated state spending proposal.

For 55 days, Pennsylvania has not had a full operating budget in place, and the latest official budget proposal put forth by the Democrats increases state spending to $29.1 billion, far more than is supported by anticipated state revenues and federal stimulus dollars.

"One way or another, the governor wants your money. In this climate, more taxes can be devastating for Pennsylvania families and employers.

"Last week, Democrats were looking to tax legal services and limit access to the courts.

"Now, we learn 'everything is on the table,' and they have a list of items, including many other 'services' they are looking to tax for more revenues – including each and every ATM transaction.

"Newspapers and magazines; movie, sports and theater tickets; museums, historic sites and the zoo will all have the state Sales and Use Tax added to their costs just to increase state spending. Research and development, advertising, and administrative services will be taxed under the governor’s plan. In order to pay for big government services, Democrats are even looking to tax Unemployment Compensation Claims, mass transit, textbooks, flags and dry cleaning.

"In order to spend, they are looking to tax. More taxes on Pennsylvanians and Pennsylvania employers are wrong and cause harm. Republicans have a better idea.

"House Republicans have introduced the $27.5 billion, no-tax-increase 2009-10 Republican Compromise Budget, House Bill 1943, which includes a $150 million increase for basic education as well as an increase for services to non-public schools; money for hospitals and health care programs that were eliminated from the governor’s proposal; and necessary dollars for human service programs.

"The House Republican proposal is a complete budget that funds the needs and priorities of Pennsylvania. Reflecting the state of the global economy, some may have to do with less, but none will have to do without.

"By using reason and setting realistic priorities, a no-tax-increase budget is indeed possible."