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The 2 big Pa. budget numbers to pay attention to this week | Thursday Morning Coffee

2021-22 tax collections came in $5.6B ahead of estimates. Why that matters

July 7, 2022 7:19 am
A proposed reduction to Pennsylvania's corporate net income tax could be included in this year's state budget.

(Getty Images).

Good Thursday Morning, Fellow Seekers.

Pay attention to these two numbers as the Republican-controlled General Assembly and the Democratic Wolf administration put the finishing touches on the state budget this week:

$48.1 billion and $5.6 billion.

The former is how much the commonwealth collected in tax revenues during the fiscal year that ended on June 30, according to newly released state Revenue Department data. The latter is amount of revenue that came in above the state’s original projections (13.2 percent more, all told).

They matter because they’re important bookends on the discussions on the spending plan that’s now a week late — the state was supposed to have an enacted budget in place by midnight last Thursday.

The 2022-23 budget year started at 12:01 a.m. on July 1 — the same day that the Revenue Department dropped the year-end tax collection numbers.

Gov. Tom Wolf and his Democratic allies in the General Assembly have spent weeks arguing that a healthy budget surplus, coupled with unspent federal pandemic relief money, will give the state the fiscal cushion it needs to increase spending on public schools and other programs benefiting Pennsylvania families.

As the two sides have struggled to get to yes, Republicans, as is their custom, have sounded a more cautionary note, arguing for what they view as a more prudent stewardship of all that cash.

We’ve yet to see the numbers for the 2022-23 fiscal blueprint. But as WITF-FM reports, majority House Republicans have said the state could see a $3.5 billion spending hike, much of it underwritten by that more than $2 billion in federal relief money. As WITF-FM notes, Wolf has called for spending $1.9 billion of the relief money.

Gov. Tom Wolf delivers his final budget address to a joint session of the state House and Senate on Tuesday, 2/8/22 (Commonwealth Media Services photo).

For the trainspotters among you, here are the highlights of how that $48.1 billion in collections breaks down.

Sales Tax: The state took in $1.2 billion in sales tax revenue in June, which was $95.6 million above estimate. Year-to-date collections totaled $13.9 billion, which was $1.1 billion, or 8.7 percent above estimates, according to the Revenue Department.

Personal Income Tax: PIT revenues totaled $1.6 billion in June, or $179.8 million above estimates, according to the Revenue Department. Year-to-date collections were $18.1 billion, which was $2.4 billion, or 14.9 percent, above estimates.

Corporate Tax: The state took in $972 million in corporate taxes in June, or $406 million above projections. Year-to-date collections totaled $7.3 billion, which was $1.7 billion, or 29.2 percent, above estimate, according to the Revenue Department.

Inheritance Tax: The state collected $121.6 million in inheritance tax revenue in June, which was $13.2 million above estimate, bringing the fiscal-year total to $1.6 billion, which was $173 million, or 12.6 percent, above estimate, according to the Revenue Department.

Realty Transfer Tax: The state took in $76 million in realty transfer tax revenue in June, which was $10.3 million above estimates. The year-to-date total was $847.1 million, which was $164.2 million, or 24 percent more than anticipated, the Revenue Department said.

House Appropriations Chairman Stan Saylor, R-York, speaks at a budget hearing on Feb. 22, 2021. (Pa. House screenshot)

Our Stuff.
House Republicans on Wednesday passed long-considered legislation to cut off state funding for the University of Pittsburgh and other state-related universities if they engage in research on fetal tissue from elective abortions, Peter Hall reports.

Calling GOP gubernatorial nominee Doug Mastriano an extremist, nine prominent Pennsylvania Republicans, including two former congressmen and the first woman elected to the state Supreme Court, have endorsed his Democratic opponent, Josh Shapiro. Peter Hall has the story.

A recent survey commissioned by AARP Pennsylvania showed what Black Pennsylvanian voters over the age of 50 are thinking about as they get ready to vote in November. Our partners at the Philadelphia Tribune break down the data.

On our Commentary Page this morning: The evidence continues to mount that climate change is not just a problem for the future — it is one that humanity is currently facing and must tackle head-on, a quartet of Penn State experts write. And as long as Pennsylvania’s minimum wage remains at $7.25 per-hour, it feeds the growth of inequalityClaire Kovach and Stephen Herzenberg, of the Keystone Research Center, write.

Abortion-rights advocates stage a protest outside U.S. Associate Justice Samuel Alito’s house after an initial draft majority opinion he wrote would overturn the landmark Roe v. Wade. (Photo by Alex Wong/Getty Images)

Elsewhere.
In the wake of Roe being toppled, friends and families are being divided over their views on abortion, the Inquirer reports.

Democratic U.S. Senate candidate John Fetterman is close to returning to the campaign trail, the Post-Gazette reports.

Some state lawmakers have asked not to be paid until the state budget is done, PennLive reports (subscriber-only).

USA Today’s Pennsylvania Capital Bureau explains how you could be impacted by a protracted budget impasse.

The state Senate has passed a long-sought bill, sponsored by Sen. Lisa Boscola, D-Northampton, that would require motorists to clear snow and ice from their vehicles within 24 hours of a storm.

The bullets that wounded two Philadelphia police officers during July 4 celebrations in the city came from the same gunWHYY-FM reports.

WITF-FM runs down the latest on the state budget.

One hundred Ukrainians have arrived in Erie after leaving their war-torn homeland GoErie reports.

In NEPA’s 8th Congressional District, Republican Jim Bognet is challenging some of the claims incumbent Democratic U.S. Rep. Matt Cartwright made in a recent ad, PoliticsPA reports.

Without the landmark Obergefell ruling, most states would have bans on same-sex marriageStateline.org reports.

After some serious drama that saw the departure of the majority of his government, U.K. Prime Minister Boris Johnson is set to step downPolitico reports.

Here’s your #Pennsylvania Instagram of the Day:

What Goes On
The House comes in at 11 a.m. today. The Senate reconvenes at 9 am.

WolfWatch
As of this writing, Gov. Tom Wolf has no public schedule today..

You Say It’s Your Birthday Dept.
Best wishes go out this morning to an old friend and colleague — Chris Krewson of LION Publishers — who celebrates today. Congratulations, sir, and enjoy your big day.

Heavy Rotation
You might have heard that Sir Paul McCartney recently rang in his 80th year. And with Macca still touring stadiums and making records when most men his age are retired, The Guardian put together a playlist of his best, post-Beatles tracks.


Thursday’s Gratuitous Soccer Link
Is Bayern Munich’s Serge Gnabry set for a return to Arsenal, where he began his career? Manchesters United and City both are reportedly interested in the winger, who could command as much as a UK50 million fee. The Guardian runs down the latest in summer transfer rumors.

And now you’re up to date.

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John L. Micek
John L. Micek

A 3-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's Editor-in-Chief. An award-winning political reporter, Micek’s career has taken him from small town meetings and Chicago City Hall to Congress and the Pennsylvania Capitol. His weekly column on U.S. politics is syndicated to 800 newspapers nationwide by Cagle Syndicate. He also contributes commentary and analysis to broadcast outlets in the U.S., Canada and the U.K. Micek’s first novel, “Ordinary Angels,” was released in 2019 by Sunbury Press.

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