General Fund revenues surged in April, exceeding the official estimate for the month by $464.7 million, or 11.8 percent. Through 10 months of the fiscal year, revenues are now $828.2 million more than expected, or 2.9 percent; a major increase from March. Almost all tax types performed well this past month, with the real story coming from the personal income tax. Many taxpayers file their final payments in April, and these remittances exceeded the estimate by $328.5 million or 34.0 percent. One possible explanation is that taxpayers paid less than normal with their quarterly estimated payments in December and January, but made up the difference with the final payments in April. This shift is a significant change from usual patterns, but federal tax changes have affected normal taxpayer behavior.
In addition to the personal income tax, the other two largest tax categories had strong months. The corporate net income tax finished $76.1 million above estimate, or 31.1 percent – also driven by strong final payments. The sales tax saw collections $43.2 million above estimate, or 4.6 percent.
Looking ahead, May is a much smaller revenue month compared to March and April. The Independent Fiscal Office will issue a new revenue estimate for 2019/20 later in the month.
According the Senate Republican Leaders, “PA revenue collections have soared to a healthy surplus, thanks in part to Republican economic policies that have focused on holding down spending and rejecting proposed tax increases, according to Senate Republican leaders.” Senate President Pro Tempore Joe Scarnati (R-25), Senate Majority Leader Jake Corman (R-34) and Senate Appropriations Committee Chairman Pat Browne (R-16) said Republicans’ commitment to fiscal restraint, rather than supporting massive spending increases and higher taxes proposed by the governor, has improved Pennsylvania’s financial position and kept more money in taxpayers’ pockets.”
That all said, any appetite by leaders to take this strong financial position and re-invest in tax credits programs like the film tax program, is undecided at this time. There is a strong push by many democrats to fund education more, both via capital improvements to facilities, but also putting more into the classroom. The Speaker of the House is seeking a significant increase in the Educational Improvement Tax Credit (EITC) allocation.
Pennsylvania Film Industry Association (PAFIA)461 Cochran Road, Box 246Pittsburgh, PA 15228(717) 833-4561 email@example.com