General Fund revenue collections exceeded estimate in May and remain ahead for the fiscal year with only one month to go. While this is good news, it appears that this year’s revenue surplus is unlikely to reach the $232 million forecast back in February by the Corbett administration. That would mean less available revenue to carry forward into the 2013-14 fiscal year, and could modestly reduce revenue projections for the next year. Both will make the 2013-14 budget more difficult.
Last month, the Pennsylvania Independent Fiscal Office (IFO) forecasted that the state would end 2012-13 with no revenue surplus. The slightly-better-than-expected May revenues point to a year-end surplus somewhere between the Corbett administration's February forecast and the more recent IFO estimate. Assuming May’s results carry forward to June, the General Fund would end 2012-13 with a revenue surplus of between $113 million and $151 million, 0.4% to 0.5% over estimate.
Onto the numbers. In May, General Fund revenues exceeded estimate by $35 million, or 1.8% — bringing the fiscal-year-to-date surplus to $102 million, or 0.4% above estimate.
For the first time this fiscal year, sales tax collections exceeded estimate — by a whisker — $1.3 million, or 0.2% of the monthly target. Fiscal year to date, sales tax collections are $308 million, or 3.7%, lower than was estimated. Lagging sales tax collections have virtually wiped out surpluses from other tax collections. For the fiscal year, total General Fund tax collections are now $22 million, or 0.1%, higher than estimate.
Corporate taxes exceeded estimate by $30 million, or 29.1%, in May, which is typically not a significant month for corporate collections. For the fiscal year, corporate tax collections are $273 million, or a healthy 6.2%, ahead of estimate. Without action by the General Assembly, corporate collections will likely decline in 2013-14 as the capital stock and franchise tax, once the state’s second largest business tax, will be eliminated in 2014.
Personal income tax (PIT) collections came in $10 million, or 1.2%, lower than estimate in May. For the fiscal year, PIT collections (the General Fund’s single largest revenue source) are $104 million, or 1%, higher than estimate.
Non-tax collections, which include investment interest, fees, and transfers from other funds, are now $67 million, or 16.5%, higher than estimate.
Check out my full analysis of the May revenue numbers, including tables and a look at how revenues have grown from last fiscal year.