Four months into the 2012-13 fiscal year, Pennsylvania’s General Fund tax collections are more than $400 million ahead of receipts at this point last year and outpacing Corbett administration year-to-date estimates.
Tax collections rebounded in September and October after missing the mark in the first two months of the fiscal year. To date, tax collections are $65 million, or 0.8%, higher than estimate, and $435 million, or 5.7%, ahead of tax collections this time last year. Both are good signs that the state’s revenues are on track, so far.
What follows is a quick summary of the latest revenue report. For more numbers and details, read my longer analysis at the Pennsylvania Budget and Policy Center's web site.
Corporate taxes made up much of the surplus in both September and October. Personal income and realty transfer taxes have also been coming in higher than monthly revenue targets. Most revenue sources are ahead of last year, signaling a continued – if stubborn – economic recovery.
Corporate tax collections look healthy now but are notoriously volatile. Roughly 75% of corporate collections will be collected in the second half of the fiscal year. This will be one area to watch.
Meanwhile, sales tax, the General Fund’s second largest revenue source, fell short of estimate in September and October. In the first quarter (July-September), overall revenue collections came up $120 million short of the Independent Fiscal Office’s (IFO) quarterly revenue estimate, largely because of lackluster sales tax collections.
Taken in total, Pennsylvania’s revenue collections are stronger than expected one-third the way through the fiscal year and certainly stronger than at this point last year. Both are positive signs as we progress through this fiscal year and as Corbett administration officials begin to develop spending plans for 2013-14.