Pennsylvania Records First Quarter Revenue Growth

The September revenue collections are in, and as I told the Harrisburg Patriot-News this week, Pennsylvania is on track to meet revenue projections for the year, despite missing official estimates for the first quarter of 2011-12.

How's that? Well, first of all, revenue collections so far this fiscal year are running ahead of the same three-month time period last year, reflecting a stubbornly slow but continued economic recovery. Tax revenue grew by 3.7% during the quarter, which is slightly ahead of estimated growth of 3.3% for the fiscal year.

While actual tax collections are below official estimates, some of that underperformance may be attributed to a change in the way those revenue estimates were made. The 2011-12 estimates predict a larger share of annual revenue coming in during the first half of the fiscal year than revenue estimates of the past several years. If 2011-12 collection patterns follow a similar course as most recent years, this change may make budget “shortfalls” more common in the first half of the fiscal year, followed by surpluses in the second half.

I first wrote about this last week after looking at July and August revenues. Looking at the full first quarter revenue figures, the analysis holds up.

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