Posts by michael wood

Facts on Marcellus Shale Jobs and Taxes

Last night, the House of Representatives passed a budget plan for 2014-15.  However, how this plan is paid for is still a mystery. One commonsense idea that could still be included in the budget is the passage of severance tax on natural gas drillers. For 2014-15 a 5% tax could raise over $400 million in new funds above the current impact fee.  This could go a long way in restoring funding cut out of the House budget plan.  

Business Tax Breaks are Burning the PA Budget Pie

Deep cuts to critical human services, health care, and education loom in 2014-15 as lawmakers attempt to bridge a $1.5 billion and growing funding gap.

Despite an improving economy, tax collections have fallen far short of revenue targets in 2013-14. The Governor’s initial projections revenue growth have proven to be overly optimistic for this year and for 2014-15.

$1.3 billion less for 2014-15 budget according to IFO

On May 1, the Pennsylvania Independent Fiscal Office (IFO) released updated revenue estimates for the remainder of 2013-14 and its initial estimate for 2014-15. With General Fund revenues already a half a billion dollars short through April, it was expected by many budget watchers that revenue projections would be scaled back. The IFO forecasts a decrease of revenue of $568 million from official estimate for 2013-14 and for 2014-15, predicts a further decline of $768 million from the Governor’s Office estimates from February. This jeopardizes the increases proposed by the Governor for 2014-15, and could lead to budget cuts from 2013-14.

Houston, We Have a (Revenue) Problem

Pennsylvania General Fund revenue collections fell short of estimate, for practical purposes, by more than $100 million in what is usually the largest month of collections for the year. March receipts typically get a boost from a swell in corporate tax payments, but lower-than-expected bank tax collections this March brought corporate tax revenues in well below estimate. Sales tax collections also missed the mark for the fifth straight month.

February Revenues Fall Short But March Will Be Bigger Month

Pennsylvania General Fund collections for nearly every major tax type fell short of estimate in February. Shortfalls in the collection of sales, personal income, and realty transfer taxes may be partly attributable to the excessive amount of inclement weather in February, but the bulk of the month's deficit is due to expectations of strong growth for 2014 falling short. This is the third consecutive month in which revenues have fallen short of targets.

Who's Right About Revenue Growth?

The Independent Fiscal Office (IFO) and Corbett administration are at odds over how much Pennsylvania will collect in taxes and other revenue for the remainder of 2013-14 and all of the 2014-15 fiscal year — to the tune of roughly $375 million. That's a little over 1% of what is expected to be spent in 2014-15.

Small Revenue Shortfall Predicted for 2013-14 But No Need to Panic — Yet

Pennsylvania is staring at a likely revenue shortfall of more than $100 million come June when the current fiscal year draws to a close, according to the latest revenue estimates from the Pennsylvania Independent Fiscal Office (IFO). A slow-growing economy has dampened tax and other collections during the first half of the 2013-14 fiscal year, and IFO analysts think the trend will continue in the months ahead.

State Revenue Collections Still on Track, but Revenue Surplus Is Now Gone

Halfway through the state's fiscal year, General Fund revenues are right on target — exceeding official estimates by a scant $2 million, or 0.02%. Tax and other collections in December came in $40 million, or 1.7%, below the monthly target, largely erasing the modest revenue surplus that had been generated so far.

One month of poorer-than-expected collections should not raise too many alarms, but we will be watching January closely. Another sub-par month of collections could mean trouble as the 2014-15 budget negotiations get under way early next month.