April Tax Collections Improve Revenue Outlook

In case you missed it last week, we published our monthly analysis of revenue collections at the Pennsylvania Budget and Policy Center's web site. Good news on the revenue front continued in April, with collections surging past monthly estimates (as they did in March), putting the state on much better fiscal footing going into 2012-13.

This is important, as March and April receipts make up over a quarter of the fiscal year’s collections. March is a pivotal month for corporate tax collections, while April is the largest month for personal income tax payments.

Revenue Shortfall to DateBack in February, when the revenue shortfall was approaching $500 million, the Corbett administration estimated that General Fund collections would fall short of their official estimates by $719 million by the end of June 2012. Some spending was frozen in 2011-12, and the Governor proposed an austere budget plan for 2012-13.

Since then, we have seen three straight months of collections exceeding monthly estimates, shrinking the revenue gap to less than $300 million. If trends continue and revenues continue to improve, the fiscal year shortfall could be less than 1% of total collections. Read more here.

That will give lawmakers an opportunity to restore some of the deep cuts proposed by Governor Tom Corbett in February. The Pennsylvania Senate approved a budget last week that takes a step in that direction, but more funding needs to be restored to schools, health care, colleges and critical human services that strengthen families and local communities.

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