October revenue collections dip, bringing year-to-date number below estimate

October revenue collections dip, bringing year-to-date number below estimate

Author: Jason Gottesman/Wednesday, November 1, 2017/Categories: News and Views

Despite a robust first quarter in terms of revenue collections, the Independent Fiscal Office reported Wednesday that October revenue collections fell over $59 million over last year’s October numbers.

 

Total collections through October ring in around $9.1 billion.

 

Year-to-date, the IFO noted, General Fund revenue collections are $9.6 million below the office's initial June estimate with tax revenues coming in at $27.4 million below estimate and nontax revenues coming in at $17.8 million above estimate.

 

As far as revenue drivers, the report issued Wednesday indicates that the two main drivers, the personal income tax and the sales and use tax, were both below estimate.

 

In terms of things to come, the IFO noted that it was anticipated that the reporting of earnings from FY 2016-2017 was deferred in anticipation of potential tax cuts at the federal level in FY 2017-2018; however, the amount or viability of tax cuts remains uncertain.

 

Should they not occur or uncertainty remain, the IFO projects that it will have to revise its revenue estimate down for the year to accommodate the lost revenue they anticipated as part of their original estimate.

 

October’s news is likely to cause some stir among those hoping to have an easier budget year next year than the most recently concluded cycle.

 

While many of the state’s top lawmakers anticipate ending the year without a deficit, or potentially even a surplus, they also noted that the eventuality of a positive outlook for the coming fiscal year depended on the strength of the economy and corresponding revenue collections.

 

Pennsylvania’s major tax collections months run from March through June.


Despite the IFO's report Wednesday, the Wolf administration cautioned that the new revenue package passed by the General Assembly and the recent state Supreme Court case affecting net operating loss carry-forwards are likely to impact original revenue projections made by the IFO in a positive way.


They anticipate a revenue estimate related to the recently-completed state budget to be certified by the Department of Revenue in the near term.


In addition, they noted, a change in state law last year allowing for a later reporting time for corporate net income taxes coupled with an extension allowed by the US Internal Revenue Service, is impacting year-over-year CNIT revenue collection comparisons.

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