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May State Revenue Collections Down $124.9 Million, $1.2 Billion For Year
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Pennsylvania collected $1.8 billion in General Fund revenue in May, which was $124.9 million, or 6.5 percent, less than anticipated, Secretary of Revenue C. Daniel Hassell reported today. Fiscal year-to-date General Fund collections total $24.6 billion, which is $1.2 billion, or 4.8 percent, below estimate. Senate Appropriations Committee Chairman Jake Corman (R-Centre) reiterated his commitment to adopting a fiscally responsible state budget before the June 30 deadline, but strongly warned that underperforming revenues continue to drive up the Commonwealth’s year-end deficit.
“Once again, month-end revenues were significantly behind Gov. Rendell’s estimate. For the month of May, revenues were approximately $125 million short, pushing the year-end deficit to $1.23 billion,” Sen. Corman said. “It is becoming more and more clear that in these very difficult economic times, Pennsylvania will have to yet again tighten an already-cinched belt, hold the line on spending, and put off costly items that we simply can’t afford.”
With revenues continuing to come in below projections, Gov. Rendell's budget, which called for funding to cover an anticipated $525 million deficit by June, is considerably out of balance. In fact, Sen. Corman noted that the continued weak revenue collections already far exceed Rendell’s anticipated year-end shortfall estimate by well over half a billion dollars.
In addition, Gov. Rendell’s proposed budget relies on federal passage of enhanced ARRA FMAP funding. However, the federal government has not authorized the additional funding, leaving the Commonwealth with an additional potential revenue hole of $848 million.
“The well of tax revenues is too dry to fill buckets of new spending,” said Sen. Corman. “I think state residents recognize those realities and are willing to deal with short-term pain in return for a better economic outlook in the long term.”
Governor-Legislators Meet
At a meeting Thursday between Gov. Rendell,, House Democrats and Senate Republicans, there was substantial agreement on what the state's rough balance sheet says about the income for the coming year-- $27.5 billion, but not complete agreement. Gov. Rendell had proposed a $29 billion spending plan and apparently was sticking to his position to increase education funding.
But that amount is based on $850 million in federal funds that have yet to be approved by Congress. The Governor and Senate Leadership agreed the Commonwealth Court ruling ordering the state to return $800 million in MCare funds to doctors to pay for medical malpractice insurance will be reversed on appeal.
Senate Majority Leader Dominic Pileggi (R-Delaware) confirmed there was talk about increasing taxes on tobacco and a natural gas production severance tax from Gov. Rendell, but of course no agreement on anything. Sen. Pileggi said they would look seriously at any tax package the House sent them. The package now pending in the House includes both those items.
House Majority Leader Todd Eachus (D-Luzerne) said part of the package should include transfer of funds from "little-used funds" that could result in hundreds of millions of dollars.
Gov. Rendell maintained cuts to meet the $27.5 billion income would mean furloughs for state employees and a drastic reduction of state services.
All sides again said they are working to get a budget done by the June 30 deadline with the three parts of the discussions-- proposed cuts, transfer from existing funds and modest tax increases still far from settled.
NewsClips: Rendell Warns Of Job Cuts
PA Seeks To Avoid Another Budget Impasse
Budget Battle Looming In PA Capitol John Baer: It's PA Budget And Reform Call Time Again Editorial: Severance Tax Won't Scare Away Gas Companies
Editorial: Severance Tax On Gas Extraction In Public's Interest Related Story
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6/7/2010 |
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