Budget Numbers (Still) Improving

budget paThe PA Revenue Department May 4 announced that collections in April exceeded expectations by $201 million.  This brings year-to-date revenues to $569.1 million above estimate.  This extra revenue was seen in Corporate Net Income Tax, Personal Property Tax, and Sales & Use Tax.  Two areas where revenues came in lower than anticipated were Real Estate Transfer Tax and cigarette/table games/liquor taxes.  This $569.1 million surplus may impact Budget negotiations between the Governor and General Assembly.

Don’t Miss the March 3 PSCFO Meeting!

Cornucopia 2012 200x167The March 3 Council program will feature both Republican and Democratic Chairs of the House and Senate Agriculture & Rural Affairs Committees to discuss what agricultural issues are likely to come up before the General Assembly.

In addition, PA Agriculture Secretary Russell Redding will present some of the Wolf Administration’s thinking on how PA Agriculture jobs and workforce development are central to Pennsylvania’s total economic well-being.

March 3 is also the day when Governor Wolf presents his State Budget for the fiscal year beginning July 1, 2015 to the General Assembly so expect plenty of buzz about the Department of Agriculture budget.   The PSCFO Board truly hopes you will attend this informative and useful session.

Click here for more information.

Why the Budget Buzz?

BudgetThe Independent Fiscal Office (IFO), created by the General Assembly in 2010 to give the legislature a separate tool for State Budget analysis, released a report that said PA is in for hard times (http://www.ifo.state.pa.us/Releases.cfm).

IFO said that the fiscal year State Budget beginning July 1, 2015 could not utilize the $619 million one-time devices and $572 in non-recurring revenues used by the Corbett Administration to balance this year’s budget and so will be $1.85 billion in the red for FY 2015-16.

Part of that analysis included an IFO prediction that PA would have $171 million less than expected this fiscal year — and that figure may be questioned given  better than estimated revenue numbers reported for October and November — $109 million more than anticipated for this fiscal year.

IFO, the Corbett Administration and the incoming Wolf Administration agree that the Commonwealth will be challenged but there is significant disagreement as to the causes and obviously whether or not the Corbett Administration got Pennsylvania out of a Rendell fiscal hole or into a new one.

The Governor’s Budget Office’s December 3 briefing recognized the fiscal shortfall. Budget Secretary Charles Zogby said that “we’ve faced these sorts of deficits every year in this administration” and they are due to mandated costs exceeding revenues.  For the 2015-16 Fiscal Year, Zogby said that there would be spending increases in debt service (interest), corrections, pensions, and in the Department of Human Services (formerly Department of Public Welfare).

Governor-elect Wolf’s transition team issued a statement December 2 which said:

  • The FY 2014-15 Budget was built on one-time revenue sources
  • Prediction: PA will be cash-flow negative from January-March 2015.
  • The state has maxed its line of credit
  • PA is 50th in the nation in job creation.