The Independent Fiscal Office Monday released new revenue estimates for FY 2014-15-- $30.55 billion-- and FY 2015-16-- $30.72 billion, according to director Matthew Knittel.
Knittel was noncommittal on the issue of whether the IFO’s recent estimate of a $1.5 billion to $1.6 billion state deficit would change.
A spokesperson for Gov. Wolf said, “Gov. Wolf understands that we cannot maintain the status quo and his budget closes the deficit without gimmicks, makes historic investments in our schools, rebuilds the middle class by strengthening manufacturing and workforce development and provides property tax relief to middle-class families and seniors.”
Senate and House Republicans had similar positions: the Wolf Administration deficit figures were over-inflated. This slow growth means the General Assembly and the Governor need to attack cost drivers through pension reform. House Republicans added action on liquor privatization.
FY 2014-15 unrestricted General Fund revenues are estimated to be $30.55 billion, $594 million above the estimate issued by the IFO at the beginning of the fiscal year. Receipts for the current year are expected to increase by $1,944 million (6.8 percent) from the prior year.
“The two largest General Fund revenue sources, sales and use and personal income taxes, are meeting or slightly exceeding expectations,” Knittel noted. “The upward revision in the estimate is largely because of unexpected revenue from the corporate net income tax and unclaimed property.”
FY 2015-16 unrestricted General Fund revenues are projected to be $30.72 billion, an increase of only $170 million (0.6 percent) over the prior year. The projection is made on a current law basis, and it does not include the impact of proposed changes to statute.
“The Pennsylvania economy is expected to continue expanding in FY 2015-16,” Knittel said. “However, some of the revenue growth from improved economic activity simply will offset one-time, or non-recurring, revenues received in the current year.”
Relative to the Executive Budget presented in March, these projections are $374 million higher for FY 2014-15 and $97 million higher for FY 2015-16, for a two-year difference of $471 million. These amounts exclude the proposed statutory changes identified in the Executive Budget.
By statute, the office issues an initial revenue estimate at the beginning of May and an updated revenue estimate by mid-June.