The tax volatility picture in every state, visualized, and how Pa. stacks up | Wednesday Morning Coffee

Good Wednesday Morning, Fellow Seekers.

It won’t be too long before the Republican-controlled General Assembly and the Democratic Wolf administration start trying to thrash out the details of a budget that will see Pennsylvania through the rest of the 2020-2021 fiscal year.

Back in May, you’ll recall, the two sides put their cudgels down long enough to agree to a $28.5 billion stopgap spending plan that provided five months’ worth of funding for the majority of state agencies, while also providing a full year of funding for K-12 and higher education across the state.

This week, policy analysts at the Pew Charitable Trusts mapped out the tax volatility in every state as the country makes its way through an economic downturn so severe that it feels an awful lot like a recession (even though, as Fortune points out, it technically is not).

That volatility, as Pew’s analysts note, is better or worse for different states, dependent on what their individual tax mixes look like. To reach their volatility scores, analysts measured the “variation in year-over-year percent changes between fiscal 2000 and 2019, based on a calculation of standard deviation. A low score means that revenue levels were similar from year to year, and a high score indicates that revenue grew or declined more dramatically.”

Overall, Pew’s analysts found that “50-state tax revenue had a volatility score of 4.96 for the 20 years ending in fiscal 2019, slightly lower than the previous year of 5.01.

According to Pew, that means “total tax revenue across the states typically fluctuated 4.96 percentage points above or below its overall growth trend. Tax revenue was more volatile than the national benchmark in 29 states and less so in 21.”

Below, a look at the respective nationwide scores and how Pennsylvania stacked up.

Overall Volatility: 3.8 for the Keystone State, according to Pew.

Pennsylvania Sales Taxes: “Sales tax revenue had a volatility score of 3.6, and averaged 27.4 percent of total tax revenue over the past decade,” the Pew analysis found.

Pennsylvania Income Taxes: “Personal income tax revenue had a volatility score of 5.1, and averaged 31.4 percent of total tax revenue over the past decade,” the Pew analysis found.

Pennsylvania Corporate Taxes: “Corporate income tax revenue had a volatility score of 15.4, and averaged 6.3 percent of total tax revenue over the past decade,” according to Pew.

Some national trends, according to Pew:

• “The highest volatility occurred in Alaska (36.9 percentage points), North Dakota (16.4), and Wyoming (13.3), all natural resource-dependent economies that rely heavily on severance tax revenue.
• “The lowest volatility occurred in three states: South Dakota (2.7), Arkansas (2.9), and Kentucky (2.9). Each of these states relies on relatively stable tax streams for over half of its revenue—sales for South Dakota, and sales and personal income for Arkansas and Kentucky.
• “Volatility scores rose in 24 states for the 20-year period through fiscal 2019, compared with scores based on the period from fiscal 1999 to 2018, though many of the increases were small enough to be obscured by rounding. New Mexico and Utah experienced the greatest increases. New Mexico’s increase was driven by an upswing in severance and sales taxes, and Utah’s by growth in personal income and sales taxes,” the Pew analysis found.
• “Corporate income tax revenue seesawed more than any other tax stream in 17 of the 20 states where it was a major tax. Volatility scores for this tax ranged from 13.0 in Tennessee to 53.7 in Alaska,” Pew noted.

If there’s a bright spot for Pennsylvania, it’s that fiscal year-to-date revenue collections are ahead of the curve. That’ll come in handy as the state looks to fill a massive budget hole — without the assistance of a Congress that is currently incapable of reaching agreement on a coronavirus relief package that includes a fresh infusion of aid to states.

“Revenue collections are ahead of estimate to this point due to better than expected economic activity through the first quarter of the fiscal year,” Revenue Secretary Dan Hassell said in an Oct. 2 statement. “The department will continue to closely monitor the situation so that the governor and members of the General Assembly have the latest information as it becomes available.”

Our Stuff.
As Democrats try to flip the state House of Representatives this fall, a senior Democrat took $600K from a pro-school choice donor who’s looking to stop them, Stephen Caruso reports.

Amid an enrollment boom, state regulators are considering applications by two new cyber charter schools, Elizabeth Hardison reports.

And with rental reforms stalled in the General Assembly, Gov. Tom Wolf has announced a workaround, Hardison also reports.

On our Commentary Page this morning, an industry veteran says it’s long past time to give direct service providers for the intellectually disabled the support they need — and deserve. And a Columbia University scholar explains how a handful of super-rich donors are influencing the 2020 election.

Elsewhere.
With infections on the rise in Pa., President Donald Trump barnstormed in Johnstown on Tuesday night, where he claimed without evidence to be immune to the coronavirus, and made other fantastical promises. The Tribune-Democrat has the story.
The Inquirer profiles Pennsylvania native and former second lady Jill Biden.
A surge of coronavirus cases in western Pennsylvania isn’t surprising, experts tell the Tribune-Review.
State health officials have named 14 counties to watch for as infections rise, PennLive reports.
More than 2.6 million Pennsylvania voters have requested mail-in ballots this voting season, the Associated Press reports (via the Morning Call).
Luzerne County prosecutors won’t pursue charges against a man who posted a ‘swastika-laden’ note to state Rep. Aaron Kaufer’s, R-Luzerne, front door, the Citizens-Voice reports. Kaufer is Jewish.

Here’s your #Philadelphia Instagram of the Day:

 

View this post on Instagram

 

??‍♂️? I’m curious: What’s your favorite Philly neighborhood to stroll around in?

A post shared by Jordan Parenti (@jordanparenti) on Oct 13, 2020 at 6:55am PDT

Philly officials and protest leaders have agreed to terms to disband a homeless encampment on the Ben Franklin Parkway, WHYY-FM reports.
The youngest Philadelphia students could make a return to the classroom after Thanksgiving, Keystone Crossroads reports.
A new Morning Consult poll shows Joe Biden with a 52-44 percent lead over Donald Trump in Pennsylvania, PoliticsPA reports. 
Unable to access traditional insurance funds or federal disaster funds, marijuana businesses are looking for relief, Stateline.org reports.
Politico homes in on the eight states that will decide the election. You will not be shocked to learn that Pennsylvania is chief among them.
Donald Trump’s ‘incompetence does not excuse his authoritarianism,’ Jonathan Chait writes for NYMag’s Intelligencer.

What Goes On.
The House Democratic Policy Committee holds an online session at 2 p.m. today.

WolfWatch.
Gov. Tom Wolf holds an 11:30 a.m. newser at PEMA to talk about the fall resurgence in COVID-19 cases and how the state intends to deal with them.

What Goes On (Nakedly Political Edition).
8 a.m.: Breakfast for Sen. Dave Argall
5:30 p.m.: Reception for House Speaker Bryan Cutler
Ride the circuit, and give at the max, and you’re out a positively mind-numbing $26,000 today — thanks to the $25K maximum ask at Cutler’s event.

You Say It’s Your Birthday Dept.
Best wishes go out this morning to CBS-21 producer Christina Maisel, who celebrates today. Congratulations and enjoy the day.

Heavy Rotation.
We’d be hard pressed to ever pick our favorite Elbow song. But certainly, this one is in the Top 5. From ‘Build a Rocket Boys,’ here’s ‘Jesus is a Rochdale Girl.’ If you have ever been young, and in love, this one will hit you straight in the heart.

Wednesday’s Gratuitous Soccer Link.
Football Association Chairman Greg Clarke has condemned the realignment program known as ‘Big Picture’ as a power-grab by the big clubs, The Guardian reports.

And now you’re up to date.