Third and State

With a strong December showing, the commonwealth now has a General Fund revenue surplus of $171 million (1.4% above estimate) for the first half of the 2012-13 fiscal year, double the Corbett administration’s revised estimate for the entire fiscal year. The strong December collections exceeded estimate by $112 million (or 4.8%).

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.

The Pennsylvania General Assembly is considering legislation that would allow many Pennsylvania employers to pocket the state income taxes paid by new employees. The plan, House Bill 2626, could come up for a vote in the House Monday.

While billed as an economic development strategy, the bill provides a multi-year subsidy for existing companies to do what they do anyway: fill vacant positions. It is costly and will lead to more cuts to schools and services for children, seniors and people with disabilities.

Over the years, online retailers have been resistant to collecting sales tax from Pennsylvania customers for otherwise taxable purchases. Doing so gave these companies an unfair price advantage over their bricks-and-mortar competitors that are, rightfully, required to collect sales tax.

The Scranton Times Tribune reports that the playing field will be leveled somewhat, as revised Department of Revenue rules go into effect for sales tax collection next month.