More money, more problems? Pa. tax collections shot up in March | Monday Morning Coffee
As another budget season beckons, the state collected $5.6B billion in general fund revenue last month
Good Monday Morning, Fellow Seekers.
Today is Monday, April 4, 2022. So if I’m doing the math correctly (and, bear in mind, I’m a journalist), just about three months remain before the Democratic Wolf administration and the Republican-controlled General Assembly have to get a deal on a new state budget.
So it could be good news that, as the new start of a new fiscal year beckons on July 1, Pennsylvania’s tax collections remain as brisk as ever, according to new state Revenue Department data.
Defying the old adage, March went out like a lion, with the state collecting $5.6 billion in general fund revenue, which was $659.1 million, or 13.5 percent, ahead of projections. So far this year, the state has collected $34.1 billion in tax revenues, which is $2.7 billion, or 8.5 percent, ahead of projections.
By any reasonable measure, this is good news. Brisk tax collections point to a healthy economy (even as inflation rages and gas prices start to look like the average cost of a bitcoin).
But as Biggie once famously noted, more money almost always means more problems.
That’s because legislative Democrats will look to those numbers and see justification (reasonably in your correspondent’s estimation) for increaased spending on a host of priorities, from public schools to paid family leave.
Legislative Republicans, meanwhile, as is their wont, will moan like Morrissey on a bad day that the state needs to tuck the money away for a rainy day, and shouldn’t spend it on anything at all — unless of course, it’s tax breaks for mega-corporations that don’t need them in the first place.
And you can expect those seemingly irreconcilable positions to remain in place as the clock ticks down on the 2021-22 budget year (in an election year, to boot) as the two sides try to reach an agreement.
So just how brisk were tax collections? Here’s a look, courtesy of Revenue Department data, at each major category.
Sales Tax: Sales tax receipts totaled $1.1 billion for March, or $208.1 million above estimate. Year-to-date sales tax collections were total $10.3 billion, which was $767.7 million, or 8.1 percent, more than anticipated.
Personal Income Tax: The state collected $1.6 billion in PIT in March, or $158.6 million above estimate. That brought year-to-date PIT collections to $11.2 billion, which is $687.6 million, or 6.5 percent, above estimate, according to the Revenue Department.
Corporate Taxes: The state collected a whopping $2.4 billion in corporate tax revenue in March, which was $188 million above estimates. Year-to-date corporate tax collections totaled $5.2 billion, which was $810.6 million, or 18.6 percent, ahead of estimates, according to the Revenue Department.
Inheritance Taxes: The state collected $158.8 million in inheritance tax last month, which was $31.4 million above estimate. That brought the year-to-date total to $1.2 billion, which is $122.2 million, or 11.7 percent, ahead of estimates.
Realty Transfer Taxes: So far, so housing boom. The state collected $74.8 million in realty transfer taxes last month, which was $21.8 million above estimate. That brought the fiscal-year total to $624.3 million, which was $114.2 million, or 22.4 percent, more than anticipated, according to state data.
Other revenues, including cigarette, malt beverage, liquor and gaming taxes, totaled $67.7 million for the month, according to state data. That was $9.2 million above estimate. That brought the year-to-date total to $1.3 billion, which is $33.4 million, or 2.6 percent, above estimate.
So where’s that leave us? I’ll once again turn to the gospel according to Biggie: It’s like the more money we come across. The more problems we see … What’s goin’ on? What’s goin’ on? (Somebody tell me) What’s goin’ on?
We’ll find out in the run up to midnight on June 30.
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What Goes On
The Senate comes in at 1 p.m. today.
11 a.m., 8E-B East Wing: Senate Transportation Committee
12 p.m., 8E-A East Wing: Senate Local Government Committee
12 p.m., 418 Main Capitol: House Democratic Policy Committee
What Goes On (Nakedly Political Edition)
5 p.m.: Reception for Rep. Barbara Gleim
5:30 p.m.: Reception for Sen. Gene Yaw
5:30 p.m.: Reception for the Senate Democratic Campaign Committee
Ride the circuit, and give at the max, and you’re out a reality-bending $13,500 today.
Gov. Tom Wolf will join a ‘Justice for Victims’ rally at 10:30 a.m. in the Capitol rotunda.
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Belated best wishes go out this morning to Wesley Robinson at the Department of Conservation & Natural Resources, and Johnna Pro, at the Department of Community & Economic Development, both of whom celebrated on Sunday.
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Monday’s Gratuitous Hockey Link
The Philadelphia Flyers topped the New York Rangers 4-3 in a shootout on Sunday night. New York rallied late with a three-goal third period, but couldn’t seal the win.
And now you’re up to date.
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John L. Micek