HARRISBURG, Pa. — Pennsylvania was predicted to start the 2021 – 2022 financial year with a mounting budget deficit, but the commonwealth is in decent fiscal shape.
Economists initially approximated more than 2.5 billion dollars in the hole at the start of the 2021 – 2022 budget year in addition to the continuation of structural deficits for years to come.
But that cycle is now broken, and revenue is up about $3 billion. It is just enough to cover any shortfalls.
“Now interestingly yes this year is pretty good. And on top of coming in above budget in terms of revenue, which is positive, we have about $7.2 billion from the federal government,” said Gene Barr, President & CEO of the PA Chamber of Business and Industry. “I think there was a big question about how quick this recovery would be. I think there was an uncertainty about how well business would be able to work remotely.”
As of May, General Fund collections total $36.6 billion, 8.5% above estimate.
Officials said the current outlook can be attributed to a boost in nearly every type of tax.
Personal Income Tax in May alone was a billion dollars more than anticipated.
“Sales tax and just the consumer spending that’s been occurring that’s led to stronger than expected collections there being one example, but really it’s been across the board,” said Jeffrey Johnson, Communications Director for the PA Department of Revenue.
But as lawmakers head back to the capitol with a heavy focus on finalizing a budget, they are weighing several variables.
Right now, PA is pocketing more money, but continued economic recovery is still uncertain.
Barr said employment growth, corporate taxes, unemployment compensation rates, and wages also remain unsure.
“So, there’s a whole lot that goes into this. So, before I can answer that, we’d all have to know answers to some of those questions for the next budget year, which of course will be 2022 – 2023 budget year.”
Author: Andrea FinneyPublication: Local 21 News - CBShttps://www.local21news.com/news/local/pennsylvania-government-revenue-up-about-3-billion