Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

More Income from Taxes May Soften Budget Cuts

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

More Income from Taxes May Soften Budget Cuts

Article excerpt

HARRISBURG -- A higher-than-expected haul of state taxes in April and a new set of revenue projections for coming months offered hope on Tuesday to legislators seeking to soften spending cuts in the upcoming budget.

Pennsylvania collected 3 percent more general fund revenue than anticipated in April, an increase driven by strong collections of corporation and sales taxes. The additional $98.9 million in general fund revenue brings the deficit for the current year to $288 million, leaving it at less than half the $719 million projected when Gov. Tom Corbett delivered his budget proposal in February.

Separately on Tuesday, the new Independent Fiscal Office released a revenue forecast that shows the state bringing in $419 million more this year than projected by the administration and $396 million more next year. Director Matthew Knittel, who joined the office last fall from the U.S. Treasury, said economic conditions have improved since the Department of Revenue produced its revenue projections last winter.

"If you're comparing to numbers that were released and the economic situation six months ago, we think that things look a little better," Mr. Knittel said. "The labor market looks a little better. The housing market even looks a little better. We do think the recovery is continuing in Pennsylvania, and nationally as well."

Allison Roberts, a spokeswoman for the Department of Revenue, said the estimates are "within the realm of reason" but that the agency is not prepared to revise its own revenue projections.

Legislative leaders said the revenue collections and projections suggest they could have more flexibility to restore spending as they head into the thick of budget season. Senate Majority Leader Dominic Pileggi, R-Delaware, said in an interview that the projections of the Independent Fiscal Office are consistent with those produced by analysts in the House and Senate. …

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