April+revenues+above+estimate,+PA+revenue+shortfall+dwindling

=By Chris Comisac= =Published by Capitolwire= =5/1/12= = = = = = = =HARRISBURG (May 1) - April revenue collections exceeded expectations by $99 million, pushing year-to-date revenue collections to $23 billion and cutting the year’s current revenue shortfall down to $288.4 million.= = = =The good economic news through April also bodes well going forward, says the Pennsylvania Independent Fiscal Office. The office estimates the state will end up with $400 million more during the current fiscal year than Gov. Tom Corbett’s administration estimated in February. The fiscal office projects an additional $400 million in revenue for next year, also available in the 2012-13 fiscal year.= = = =The Corbett administration based its 2012-13 proposed state budget on the commonwealth having a revenue shortfall, when the current fiscal year ends on June 30, of $719 million. In February, the IFO projected the state would end the fiscal year with a shortfall of about $500 million. Now they have cut that estimate by another $200 million, to a shortfall just over $300 million.= = = =“If you’re comparing to the numbers that were released and the economic situation six months ago, we think that things look a little better,” said IFO Director Matthew Knittel during a Tuesday briefing about the IFO’s initial revenue estimates. “The labor market looks a little better, the housing market even looks a little better, so we do think the recovery is continuing in Pennsylvania, and nationally as well.”= = = =Senate Democrats think final fiscal year revenues will be even better than the IFO predicts.= = = =Senate Minority Appropriations Committee director Randy Albright emailed: "... given today's collections pushing April receipts $99 million above estimate for the month, and the year to date shortfall below $289 million, it is clear the IFO estimates are conservative. The year-end shortfall will likely fall below $200 million."= = = =That would add another $100 million to the $800 million that the IFO says is available to spend above Gov. Corbett's February estimate.= = = =In April, personal income tax collection led the way, yielding $1.68 billion in revenue for the month. However, that total was $26.4 million below Department of Revenue projections for the month. For the year, PIT collections are nearly $9 billion, or approximately $224.5 million short of expectations.= = = =Sales and use tax collections continued to beat Revenue Department projections last month. The consumption tax performed $35.7 million ahead of estimates, pulling in a total of $777.3 million. To date, sales tax collections total about $7.28 billion, or $74.1 million more than anticipated. Other consumption tax collections – such as those on cigarettes and liquor – totaled $116.1 million in April, or more than $1.1 million under estimate.= = = =Also performing better than expectations last month was the Corporation Tax. Collections for April totaled $587.2 million, or $68.7 million more than projected. For the year, collections of that tax are nearly $4.2 billion, or approximately $122.3 million below estimates.= = = =Knittel noted during his briefing that corporation tax collections were negatively affected by the state's allowing businesses to immediately deduct a portion of their future depreciation costs on equipment purchases.= = = =The "bonus depreciation" also impacted last year's collections, said Knittel, with the overall impact during the two-year period being between $300 million and $350 million.= = = =However, that will be more than offset in the next few years, said Knittel.= = = ="Let me again stress, it's purely a timing issue – it’s going to reverse itself,” Knittel said. “Probably most of those monies will be recouped over the next two or three fiscal years.”= = = =All other tax collections, such as the realty transfer tax and the inheritance tax, totaled $101.0 million, or about $1.7 million below expectations, for April.= = = =Non tax revenue for last month - from such things as liquor store profits, fees and fines - totaled $160.2 million, or $23.7 million above estimate. The year-to-date total for those revenues is $358 million, or $7.4 million, above expectations.= = = =Knittel said the overall revenue shortfall should remain fairly unchanged during the next six weeks before his office releases its official revenue estimates for FY2011-12 and FY2012-13 on June 15.= = = =“The economic forecast we put into our model should not change much during the next month,” said Knittel, who noted a few items – such as consumer spending levels and changes in the labor market – could affect the final totals, but not by much.= = = =“I wouldn’t think it would change too much,” said Knittel= = = = = = = = = = = =News= =home=