Rendell said he would solve another vexing statewide cost - transportation - by leasing the Pennsylvania Turnpike to a private interest and fund mass-transit needs through a new tax on oil-company profits.
He also took the occasion to call for new gun-control laws - prompting applause from some legislators but hisses from others.
Overall, the budget for fiscal 2007-08, which begins in July, increases state spending to $27.3 billion. That's up 3.5 percent from the last budget.
"The budget that I have introduced today charts a course for long-term growth," he said in a 55-minute address to a joint session of the General Assembly, "and I believe it positions Pennsylvania to regain its rightful place as a leader among the states."
As The Inquirer reported Sunday, his proposed sales-tax increase would raise that levy from 6 percent to 7 percent, its first increase in 39 years, and would apply to all consumer goods except those currently not taxed, such as food, clothes and prescription drugs.
Under Rendell's plan, half the new sales-tax revenue, or $420 million, would go to property-tax cuts, while the other half would repair gaps in the general fund caused by cutbacks in federal health-care funding, the governor said.
This moves up by a year the property-tax rebates scheduled to come when full slot-machine gambling operations are underway in 2008. More than 337,000 senior citizens who qualify are already receiving the property-tax rebates; the governor's proposal would increase that number by 419,000.
The average property-tax cut for everyone else under the new plan: $170 per household - except for Philadelphia.
