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Senate Appropriations Committee Report

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(all tables and graphics can be viewed online) 

General Fund Revenues through January

General Fund revenue collections for the month of January exceeded the estimate by $376.8 million.  General Fund tax revenues for January were $361.4 million    higher than the monthly estimate, and non-tax revenues were $15.4 million above the estimate.  General Fund revenue collections thus far this fiscal year are $1.85 billion ahead of estimate.  The Independent Fiscal Office released its Mid-Year Update on January 31st and predicted that FY 2021-22 General Fund revenue collections would exceed the Official Revenue Estimate by $2.79 billion at the end of the current fiscal year. 

Sales and use tax (SUT) collections received in the month of January are the highest of the fiscal year because they include payments remitted from the holiday shopping season.  January SUT payments exceeded the estimate by $94.7 million and were above last year’s collections by $177.8 million, or 16.4%.  Pennsylvania’s ability to collect sales tax on many internet sales appears to be paying off as more retail purchases are made online.

Final individual estimated personal income tax (PIT) payments for the 2021 tax year, which were due January 17th, were $85.4 million above estimate for the month.  Corporate net income tax (CNIT) payments were over the estimate by $40.6 million.  Non-tax revenues exceeded the estimate by $15.4 million, bolstered by an unanticipated $10 million sports wagering license fee payment.

January 2022 General Fund Revenue vs. Monthly Estimate:

• General Fund revenue collections of $3.59 billion were above the monthly estimate by $376.8 million, or 11.7%.
• General Fund tax revenues were higher than the estimate by $361.4 million, or 11.3%.
• Corporation taxes were $20.9 million, or 11.3%, over the estimate.
• Sales and use tax collections beat the estimate by $94.7 million, or 8.1%, for the month.
• Personal income tax collections were ahead of estimate by $180.1 million, or 11.5%.
• Non-tax revenues exceeded the estimate by $15.4 million.

Fiscal Year 2021-22 vs. the Official Revenue Estimate To-Date:

• Total General Fund revenues are $1.85 billion, or 7.6%, higher than the Official Revenue Estimate through the month of January.
• General Fund tax revenue is $1.77 billion, or 8.7%, above estimate.
• Corporation taxes are $598.1 million, or 28.9%, over the estimate.
• Sales and use taxes are $503.7 million, or 6.5%, above estimate.
  • General SUT collections are $474 million, or 7.1%, above estimate.
  • SUT collections on motor vehicle sales are $29.7 million, or 2.9%, higher than the estimate.
• Personal income tax collections exceeded the estimate by $488.1 million, or 6%.
  • Withheld PIT is $204.1 million, or 3.1%, over the estimate.
  • Non-withheld PIT (annual & estimated payments) is $284 million, or 18.5%, more than the estimate.
• Realty transfer tax revenues are $73.5 million, or 17.6%, more than the estimate.
• Inheritance tax collections are $76.4 million, or 9.4%, above estimate for the year.
• General Fund gaming taxes are $17 million, or 10%, higher than the estimate.
• Non-tax revenues are $76.9 million, or 1.9%, more than the estimate.

Fiscal Year 2021-22 vs. Fiscal Year 2020-21:

• Total General Fund revenues through January are $4.96 billion, or 23.4%, higher than last year at this time.
• Much of the difference between the two fiscal years is the result of a one-time transfer of $3.84 billion from the federal Coronavirus State Fiscal Recovery Fund to the General Fund for revenue loss replacement.
• However, FY 2020-21 included $1.8 billion of additional revenue being shifted from FY 2019-20 into the first two months of the 2020-21 fiscal year because of tax filing extensions resulting from the pandemic.
• These irregularities skew the relationship between FY 2020-21 and FY 2021-22 revenue collections and make any direct comparison difficult.

Motor License Fund:

• Motor License Fund revenues are above the estimate by $61 million, or 3.9%, through January.
• Motor License Fund revenues are $42.2 million, or 2.6%, higher than last fiscal year at this time.

Commonwealth Employee Vaccination Incentive Program

In early November, the Wolf Administration announced a plan to provide five additional days of leave for employees who are or will become vaccinated by December 31, 2021.  That leave must be taken by the end of March 2022 and will be paid out as compensation if it is not used.

The Administration indicated this program would not result in increased appropriation need as agencies will have to live within existing budget levels and will need to prioritize this spending just like other purchases of software, equipment, office supplies, etc. 

The Senate Republican Appropriations Committee put an initial estimate of the cost of this proposal in the $20 million to $50 million range.  Based on revised data provided by the Governor’s Budget Office, it appears the original estimate was valid.  The number of vaccinated individuals is approximately 46,000, or nearly 70% of the workforce that is under the Governor’s jurisdiction.  That is an increase from 50% in November 2021.

Rainy Day Fund Comparison

Pennsylvania’s Rainy Day Fund balance has been bolstered as a result of Senate Republicans’ insistence on putting the entire ending balance from FY 2020-21 into the fund.  Despite this prudent action, Pennsylvania has more work to do in this regard. Many other states have accumulated Rainy Day Fund balances that make up larger percentages of their expenditures than Pennsylvania has.  Pennsylvania’s Rainy Day Fund balance is still well below the national average and is at the lower end of the 5%-15% range preferred by rating agencies.

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