“Like” me on Facebook:
Senate Appropriations Committee Report
General Fund Collections, $49.8 Million, or 2.6%, Above Estimate for May
General Fund revenue collections for the month ended May 2015 totaled $1.96
billion, which was $49.8 million, or 2.6%, above estimate. Fiscal year-to-date
collections total $27.68 billion, which is $618.9 million, or 2.3%, above
estimate. Total FY 2014-15 General Fund revenues are $1.89 billion, or 7.3%,
more than last year.
As discussed in previous months, gaming license fees and gas lease revenues
in the amount of $220 million will not materialize in June as originally
expected. Taking this into account means that fiscal year-to-date collections
are effectively $398.9 million above estimate for the year.
The General Fund revenue surplus of $49.8 million for the month of May is
attributable to continued strong non-tax collections resulting from changes to
the dormancy period for unclaimed property (i.e. Treasury escheats). Escheats
revenue exceeded the monthly estimate by $51.7 million in May while General Fund
tax revenues were below the monthly estimate by $2.5 million thus resulting in
the aforementioned monthly surplus.
Corporation taxes were above estimate for the month by $2.2 million, or 2.3%.
As of May 31st, the year-to-date corporate net income tax surplus stands at
$285.5 million; the capital stock/franchise tax year-to-date shortfall is $38.2
million; the gross receipts tax shortfall is $58.4 million; the insurance
premiums tax shortfall is $1.9 million; and the financial institutions tax (i.e.
bank shares tax) shortfall is $38.8 million. Total corporation taxes are above
estimate for the year by $168.1 million or 3.9%.
Sales and use tax (SUT) collections were below estimate by $37.2 million, or
4.8%, for the month. General sales and use tax accounted for $27.5 million of
the monthly shortage, and sales tax on motor vehicles was short of estimate by
$9.7 million. Sales and use tax collections for May 2015 were actually 1.5%
lower than May 2014 collections, which is significant because lower gasoline
prices and warming weather were expected to jumpstart consumer spending.
Year-to-date SUT collections for FY 2014-15 are 3.9% ahead of last fiscal year
and $16.3 million, or 0.2%, above this year’s estimate.
Personal income tax (PIT) collections were above estimate by $12.7 million
for the month. Employers’ withholding was below estimate for the month by $3.3
million, or 0.5%. PIT received from estimated and annual payments was ahead of
estimate by $16 million for the month. Personal income tax collections are $70.5
million, or 0.6%, above estimate for the year. PIT revenues are 5.8% higher than
last year through the month of May.
Realty transfer tax (RTT) collections were $916,505, or 2.8%, above estimate
for the month. RTT is now $29.9 million, or 7.5%, below estimate for the year.
Inheritance tax collections were $2.2 million above estimate for the month, and
they are now $74.3 million, or 8.9%, above estimate for the year. The strong
inheritance tax collections result from a one-time payment of $100 million
received earlier in the fiscal year.
Cigarette tax collections were $3.6 million, or 4.2%, below estimate for the
month and $13.3 million, or 1.6%, below estimate for the year. Liquor tax
collections were $464,294 below estimate for the month, and they are now $1.2
million, or 0.4%, below estimate for the year. Table games tax collections of
$8.9 million were $158,203 short of the monthly estimate. The table games tax is
$3.2 million above estimate for the year.
As we enter the final month of the fiscal year, it is important to note that
the May surplus, and much of the yearly surplus, results from one-time revenues
that cannot be counted on in future years to help offset the structural budget
deficit. In addition, the year-to-date surplus will be significantly reduced by
year’s end due to $220 million of casino license fees and gas lease revenues
that will not be remitted in June as was anticipated in the Official Revenue
Recurring revenue sources, combined with continued fiscal restraint on the
spending side of the budgeting equation, are the keys to future fiscal stability
for the Commonwealth. Enactment of liquor and pension reforms put forth by the
House and Senate majority caucuses will provide recurring revenues and budgetary
savings that will put the Commonwealth on a stabilized fiscal trajectory.
Rainy Day Fund
The Budget Stabilization Reserve Fund which is commonly referred to as the
“Rainy Day Funds,” is a special
revenue fund designated to receive a statutorily determined portion of any
General Fund fiscal year-end surplus. The Fiscal Code specifically provides that
25% of any General Fund surplus occurring at the end a fiscal year must be
deposited in the Rainy Day Fund by the end of the next succeeding quarter. When
the balance of the Rainy Day Fund equals or exceeds six percent of that year’s
revenue collections, the statutory transfer requirement is reduced to 10%.
Monies deposited in the Rainy Day Fund may only be used by the Commonwealth
when emergencies involving the health, safety or welfare of Pennsylvania
citizens or economic downturns resulting in significant unanticipated revenue
shortfalls that cannot be dealt with through the normal budget process. In
addition, the Commonwealth is prohibited from using Rainy Day Fund monies to
begin or fund new programs but may use such monies to fund vital programs in
danger of being eliminated or reduced due to economic downturn.
Balances in the Rainy Day Fund may only be appropriated upon request of the
Governor and requires the approval of a separate appropriation bill by a vote of
two-thirds of the members elected to the Senate and the House of
The current Rainy Day Fund balance is $231,000, an amount that would support
the state government for about four minutes. On average, states maintain 5.9% of
annual spending in their Rainy Day Funds. For Pennsylvania that would equal $1.7
billion. As recently as 2009, Pennsylvania’s Rainy Day Fund
balance was $755 million. However, the Great Recession and its impact on
Commonwealth revenues necessitated the transfer of those monies to the General
Fund to support the operation of state government as part of the Fiscal Year
2009-10 budget. Since that time, it has been necessary to suspend transfers to
the Rainy Day Fund in order to balance subsequent years budgets.
The following charts provide additional detail and perspective on the
Commonwealth’s reserve fund.
Contact Senator Browne:
On the Web:
702 W. Hamilton Street
9 AM to 5 PM
281 Main Capitol
9 AM to 4:30 PM
Western Lehigh County
Upper Macungie Township Building
8330 Schantz Road
By Appointment Only
Northern Lehigh County
North Whitehall Township Building
3256 Levans Road
Coplay, PA 18037
By Appointment Only