Rocked by COVID economy, Pa. finishes 2019-20 budget year $3.2B in the red

Six weeks after lawmakers sent Gov. Tom Wolf a $25.8 billion stopgap spending plan, Pennsylvania has seen its tax collections crater in response to the pandemic-driven dip in the economy.

The state finished the 2019-20 budget $3.2 billion, or 9.1 percent, below its expectations, collecting $32.3 billion in general fund revenues, according to state Department of Revenue data made public on Wednesday.

The state’s fiscal picture darkened considerably in June, the final month of the fiscal year, where tax collections were nearly 18 percent, or $577.4 million, behind estimates, collecting just $2.7 billion revenues. In a statement, the Revenue Department said a shift in tax deadlines to July 15 accounted for $133 million worth of the shortfall, while the $444.4 million balance was directly attributable to the pandemic-induced dip in the economy.

“As expected, June was a month where the pandemic had a significant impact on the commonwealth’s revenue collections,” Revenue Secretary Dan Hassell said in a statement. “We are also seeing the effects of extending tax filing deadlines to provide taxpayers with relief and more time to file. That includes the deadline for filing personal income tax returns, which is now July 15.”

Pa. faces $2B budget deficit as COVID-19 delays taxes, throttles business

Here’s a closer look at how June’s tax collections shook out:

Sales Taxes: Collections totaled $974.2 million for June, or $60.5 million below estimate, the Revenue Department said. Fiscal year-to-date sales tax collections were $10.8 billion, which was $636.6 million, or 5.6 percent, less than anticipated.

Income Taxes: Income tax collections for June were $1 billion, or $241.8 million less than estimated. Year to date collections were $12.8 billion, which was $1.7 billion, or 11.9 percent less than estimated. The state shifted income tax submittals to July 15, which means a bump is yet to come.

Corporate Taxes: Corporate taxes total $398.7 million for June, or $208.5 million behind projections. Year to date collections totaled $4.8 billion, which was $769.4 million, or 13.7 percent, below estimate, according to state data.

Inheritance Taxes: Inheritance tax collections totaled $80.1 million, or $21.8 million below estimate. That brought  the fiscal-year total to $1.1 billion, which was $18.1 million, or 1.6 percent, below estimate, the Revenue Department said.

Realty Transfer Taxes: Realty transfer taxes from home sales totaled $33.1 million last month, or $26.5 million below estimate. That brought the fiscal-year total to $497.8 million, which is $58 million, or 10.4 percent, less than anticipated.

Sin Taxes: Tax collections from cigarette, malt beverage and liquor sales, along with and gaming taxes, totaled $136.8 million for the month. That was $41.3 million below estimate. And it brought the fiscal-year total to $1.5 billion, which is $96.6 million, or 5.9 percent, below estimate, the Revenue Department said.