Pennsylvania Revenue Department Releases April Collections

HARRISBURG, Pa., May 3 /PRNewswire-USNewswire/ -- Secretary of Revenue C. Daniel Hassell today reported that Pennsylvania collected $2.9 billion in General Fund revenue in April, which was $390 million, or 11.8 percent, less than anticipated. Fiscal year-to-date General Fund collections total $22.8 billion, which is $1.1 billion, or 4.6 percent, below estimate.  

"Revenues continued to deteriorate during the major tax collection month of April. We will have to develop options to address the shortfall to be able to enact a balanced budget for FY2010-11. It will require difficult choices by all involved in state government," said Budget Secretary Mary Soderberg.

Hassell and Soderberg pointed out that $100 million the state had budgeted to receive by April from casino operators for one-time table games license fees was not yet submitted, but should arrive by June 1, as required by statute. That makes the $390 million April shortfall and the $1.1 billion year-to-date figure appear worse than they actually are by $100 million. Still, the state faces at least a $1 billion problem. 

In February, the year-end deficit was projected to reach $525 million. As of April, the year-to-date shortfall (not counting the expected table games fees) is $1 billion. Soderberg said it is clear that national economic indicators are finally going in the right direction. With another significant revenue month coming in June, it makes sense to wait until then to revise the revenue estimate.

Pennsylvania's April corporation tax collections showed the most severe shortfall among tax categories. Revenue of $436.9 million was $147.4 million below estimate. Year-to-date corporation tax collections total $4 billion, which is $430.6 million, or 9.8 percent below estimate. 

Sales tax receipts totaled $708.5 million for April, $26.7 million below estimate. Year-to-date sales tax collections total $6.6 billion, which is $342.9 million, or 4.9 percent less than anticipated. 

Personal income tax (PIT) revenue in April was $1.4 billion, $128.6 million below estimate. This brings year-to-date PIT collections to $8.2 billion, which is $264.5 million, or 3.1 percent below estimate. 

PIT withholding for April was actually above estimate by $29.2 million, which could be a sign of an improving economy. Yet overall, the PIT collections were significantly under estimate as taxpayers filed their 2009 returns, reflecting last year's recession. 

In another sign of modest growth, non-motor vehicle sales tax collections improved by $13.3 million over last year's monthly figure, although they still remained below the official estimate.

After struggling through a 2008-09 fiscal year with a $3.2 billion revenue shortfall, Governor Edward G. Rendell's administration insisted on a conservative zero-growth revenue estimate for 2009-10, despite efforts by some members of the legislature to project one-percent revenue growth. 

"Many other states are experiencing the same difficulty climbing out of the national recession," Soderberg said. "Independent analysts such as the PEW Center on the States have identified Pennsylvania as a well-managed state that is more fiscally sound than most others. Even so, the history of recent recessions has shown that all states can expect to have their revenues lag by a year or more, even when the national economy begins to rebound." 

Approximately 40 states are currently experiencing revenue shortfalls, and as of February, 36 states had made budget cuts during the current fiscal year, according to the National Association of State Budget Officers. For example, Texas is currently $1.5 billion behind estimates in sales tax alone. Indiana's overall revenues are $867 million less than expected, and New York faces a $9 billion shortfall. 

Soderberg also pointed out that in addition to the tax collection shortfall in the current fiscal year, Pennsylvania had been counting on $472 million for transportation funding next year from tolling Interstate 80, a proposal which the federal government rejected last month.

"Not only did we lose the transportation dollars that we had been expecting, but the highway and bridge projects funded by I-80 tolls would have translated into jobs and economic growth. We have to replace that money so we can generate the additional employment and economic boost we had hoped for," she said. 

Pennsylvania's other General Fund revenue figures for the month included $69.1 million in inheritance tax, $1.8 million above estimate, bringing the year-to-date total to $614.8 million, which is $11.2 million below estimate.  

Realty transfer tax was $23.9 million for April, $4.6 million above estimate, bringing the total to $235.8 million for the year, which is $8.6 million more than anticipated. 

Other General Fund tax revenue, including cigarette, malt beverage and liquor taxes totaled $117.9 million for the month, $2.6 million above estimate and bringing the year-to-date total to $1 billion, which is $34.6 million above estimate.  

Non-tax revenue totaled $165.9 million for the month, $96.4 million below estimate, bringing the year-to-date total to $2.2 billion, which is $103.6 million below estimate. 

In addition to the General Fund collections, the Motor License Fund received   $301.5 million for the month, $5.2 million below estimate. Fiscal year-to-date collections for the fund total $2.2 billion, which is $15.6 million, or 0.7 percent, below estimate.

For more information on monthly tax collections, visit www.revenue.state.pa.us.

Media contacts:

Stephanie Weyant, Department of Revenue, 717-787-6960

Susan Hooper, Office of the Budget, 717-265-8067

Gary Tuma, Governor's Office, 717-783-1116.

SOURCE Pennsylvania Department of Revenue