May State Revenue Down $124.9 Million

Pennsylvania collected $1.8 billion in General Fund revenue in May, which was $124.9 million, or 6.5 percent, less than anticipated, Secretary of Revenue C. Daniel Hassell reported today. Fiscal year-to-date General Fund collections total $24.6 billion, which is $1.2 billion, or 4.8 percent, below estimate.
Senate Appropriations Committee Chairman Jake Corman (R-Centre) reiterated his commitment to adopting a fiscally responsible state budget before the June 30 deadline, but strongly warned that underperforming revenues continue to drive up the Commonwealth’s year-end deficit.
“Once again, month-end revenues were significantly behind Gov. Rendell’s estimate. For the month of May, revenues were approximately $125 million short, pushing the year-end deficit to $1.23 billion,” Corman said. “It is becoming more and more clear that in these very difficult economic times, Pennsylvania will have to yet again tighten an already-cinched belt, hold the line on spending, and put off costly items that we simply can’t afford.”
With revenues continuing to come in below projections, Gov. Rendell's budget, which called for funding to cover an anticipated $525 million deficit by June, is considerably out of balance. In fact, Sen. Corman noted that the continued weak revenue collections already far exceed Gov. Rendell’s anticipated year-end shortfall estimate by well over half a billion dollars.
In addition, Gov. Rendell’s proposed budget relies on federal passage of enhanced ARRA FMAP funding. However, the federal government has not authorized the additional funding, leaving the Commonwealth with an additional potential revenue hole of $848 million.
“The well of tax revenues is too dry to fill buckets of new spending,” said Sen. Corman. “I think state residents recognize those realities and are willing to deal with short-term pain in return for a better economic outlook in the long term.”