The last month of the fiscal year was a decent one for Pennsylvania, revenue-wise, with returns coming in slightly higher than expected. But it comes at the end of a year of unexpectedly dismal earnings.
The commonwealth ended 2016-17 with its revenues over a billion dollars below projections. Its expectations for the new fiscal year are more modest.
The three primary tax categories are sales, personal income, and corporate income taxes. All three finished well under initial estimates; sales taxes missed the mark by 2 percent, PIT by 3 percent, and corporate income taxes by 6.6 percent.
The state revenue department confirms that this means the commonwealth is starting the 2017-18 fiscal year short $1.1 billion, plus another $400 million that it ended up spending over initial budget projections.
That leaves a shortfall of a $1.5 billion going into this fiscal year. And a spokesman for the revenue department said the state will also need to find an additional billion to “balance out future year budgets, not just this fiscal year.”
The revenue department hasn’t yet released its growth projections for the new fiscal year. The spokesman said they’re “hopeful the weaknesses experienced in 2016-17 are subsiding,” but “still cautious about the outlook for 2017-18.”
The Independent Fiscal Office has projected the revenues will be a few tenths of a percent better than this year’s.