Pennsylvania Revenues Up $3B At Start Of Budget Sprint

By Stephen Caruso, Pennsylvania Capital-Star

June 2, 2021

With one month remaining until the deadline to pass a new state budget, Pennsylvania’s coffers are already nearly $3 billion over projections, according to new numbers from the state Department of Revenue.

Revenue Secretary Dan Hassell said in a statement that the higher-than-expected returns were from stronger-than-expected collections of nearly every type of tax the state levies.

The numbers are the inverse of the cloudy scenario that greeted Democratic Gov. Tom Wolf and the Republican-controlled General Assembly earlier this year. At the time, Pennsylvania appeared set to face a $2.5 billion to $3.5 billion budget deficit, compared to projections.

Wolf, at the time, suggested $37.8 billion in spending, funded by an income tax increase, that would put an extra $1.35 billion into public education.

Wolf’s proposed school spending is aimed at fully funded schools serving regions with growing populations without taking any dollars away from schools in regions with shrinking populations.

As of the end of May, the state had collected $36.6 billion. Democratic lawmakers have expressed optimism that Pennsylvania is on track to collect enough tax money to accomplish Wolf’s plan without a tax increase this year.

The bullish revenues are on top of $7.3 billion in federal stimulus funding, leaving officials with almost $10 billion in extra dollars.

Majority Republicans in the the House and Senate have signaled they’ll be unlikely to spend those new dollars.

Democrats, however, have rolled out plans to spend the federal money on everything from community colleges to gun violence prevention as the state recovers from the COVID-19 pandemic that left tens of thousands dead and led millions to lose their jobs.

There is additional uncertainty as negotiations continue in Washington D.C. on an infrastructure bill that could bring still more federal dollars to Pennsylvania.

Such funds could be needed to tackle a coming $400 million drop in public transit funding in 2022.

Closed-door budget negotiations are ongoing, and officials have said they hope to pass an on time spending plan.

The deadline to pass a state budget for the next fiscal year is June 30.

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