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November offers no relief for Pa. revenue shortfall, despite October bump

Pennsylvania’s revenue shortfall is continuing into the holiday season.

The state collected $2 billion in general fund revenue last month, $79.5 million – or 3.8 percent – less than expected, the Pennsylvania Department of Revenue announced this week.

That shortage continues Pennsylvania’s overall shortfall so far for 2016-2017. To date, the state has collected $10.8 billion in the fiscal year that started in July – $261.8 million, or 2.4 percent, below budget estimates.

If the shortfall continues, lawmakers may need to make cuts later in the year to make Pennsylvania’s $31.6 billion budget, officials said in October. But the state has seen signs pointing toward better collections in the rest of the fiscal year, said Kevin Hensil, communications director for the revenue department.

“We are monitoring the shortfall and will continue to do so in the coming months,” Hensil said via email Friday.

He noted the state collected 1.6 percent more than expected in October, and income tax withheld by employers is up 3.1 percent for the fiscal year.

The state has also seen reports of a strong start to the holiday shopping season, he said – a good sign for sales tax receipts in the coming weeks. And lawmakers have pointed to Pennsylvania’s expanded alcohol sales as another potentially growing source of revenue.

Last month, however, revenue came in below estimates in almost every stream, including personal income tax, the state’s largest source of income. That revenue was $20.2 million less than expected in November, and is down 1.8 percent for the fiscal year so far.

One category did come in significantly above projections. The state brought in $46.5 million in non-tax revenue, bringing the year-to-date total to $49.1 million, or 81.1 percent above estimates. This month’s increase was due largely to unclaimed property, which was down in October but often shifts from month to month, Hensil said.

Collections from other revenue streams can be viewed on the revenue department’s website.

Gov. Tom Wolf is “very concerned” about the shortfall, but the fiscal year is not yet halfway done, said Jeff Sheridan, the governor’s press secretary. Now is too early to say what specific measures Wolf could take to address the issue, although he is looking for a “balanced approach” to next year’s budget, he added.

Jennifer Wentz
Jennifer Wentz covers Lancaster County, York County, financial services, taxation and legal services. Have a tip or question for her? Email her at jwentz@cpbj.com.

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