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Senate Appropriations Committee Report
General Fund Revenue Collections 1.3% Below Monthly Estimate
General Fund revenue collections for the month ended May
2016 totaled $1.94 billion, which was $25.4 million, or 1.3%, below estimate.
Fiscal year-to-date collections total $27.84 billion, which is $97 million, or
0.3%, above estimate. Total FY 2015-16 General Fund revenues are $163.8 million,
or 0.6%, more than last year.
Corporation taxes were below estimate for the month by $20 million, or 19.9%.
As of May 31st, the year-to-date corporate net income tax surplus stands at $7.3
million; the capital stock/franchise tax year-to-date surplus is $32.8 million;
the gross receipts tax surplus is $70.1 million; the insurance premiums tax
deficit is $27.4 million; and the financial institutions tax (i.e. bank shares
tax) surplus is $401,455. Total corporation taxes are above estimate for the
year by $85.7 million, or 1.9%.
Sales and use tax (SUT) collections were above estimate by $9.1 million, or
1.2%, for the month. General sales and use tax was ahead of estimate by $11.3
million, or 1.7%, but sales tax on motor vehicles was short of estimate by $2.2
million, or 1.8%. Sales and use tax collections for May 2016 were 6.1% higher
than May 2015 collections. Year-to-date SUT collections for FY 2015-16 are 3.6%
ahead of last fiscal year and $15.5 million, or 0.2%, above this year’s
Personal income tax (PIT) collections were $43.9 million below estimate for the
month. Employers’ withholding was below estimate for the month by $26.1 million,
or 3.5%. PIT received from estimated and annual payments was short of estimate
by $17.8 million for the month. Personal income tax collections are $150.4
million, or 1.3% below estimate for the year. PIT collections, which make up
approximately 41% of all General Fund revenues, are 2.8% higher than last year
through the month of May.
Realty transfer tax (RTT) collections were $956,639, or 2.5%, below estimate for
the month. RTT is now $574,275, or 0.1%, above estimate for the year.
Inheritance tax collections were $6.8 million, or 8.9%, above estimate for the
month, and they are now $26.8 million, or 3.2%, above estimate for the year.
Cigarette tax collections were $332,825, or 0.4%, above estimate for the month,
but they are $2.4 million, or 0.3%, below estimate for the year. Liquor tax
collections were $1.76 million, or 5.9%, below estimate for the month, and they
are now $527,903, or 0.2%, ahead of estimate for the year. Table games tax
collections of $8 million were $182,347 short of the monthly estimate. The table
games tax is $777,914, or 0.8%, below estimate for the year. Non-tax revenue was
$4.5 million over estimate for the month.
May’s $25.4 million revenue shortfall reduces the year-to-date revenue surplus
from $122.5 million at the end of April to $97 million. Continued revenue
underperformance is problematic as it directly affects the General Fund balance
sheet and the FY 2016-17 revenue estimate. Unfortunately, we anticipate further
erosion of the year-to-date revenue surplus during the month of June. It is
conceivable that we will see June revenues underperform the estimate by $25
million to $50 million. We will monitor revenues on a daily basis throughout the
remainder of the fiscal year.
Motor License Fund collections were $4.2 million, or 1.7%, above estimate for
the month of May. The Motor License Fund is $33.8 million, or 1.4%, below
estimate for the year
Lottery Fund Update
Year-to-date Lottery Fund collections are $140 million, or 10%, above last
year’s levels. That performance has largely been driven by the historic $1.6
billion Powerball jackpot in January, resulting in nearly $100 million of
Lottery revenue in a single week. Following that jackpot, weekly revenues
returned to expected levels.
The strong revenue performance, however, will not translate into a strong ending
balance for the Lottery Fund. Estimates for prize payouts and vendor commissions
have also increased by $115 million since the Governor submitted his budget in
February, nearly consuming the entire revenue gain. If the Lottery Fund repays a
cash flow loan by the end of this fiscal year, the ending balance will only be
$15 million to $20 million (plus a $75 million reserve).
Looking to next year, Lottery Fund revenues are actually projected to decline
because the historic Powerball jackpot cannot be assumed to recur. And despite
using somewhat optimistic revenue assumptions, the Administration projects the
$75 million reserve will be depleted by the end of FY 2016-17, and the balance
in the fund will be less than $10 million.
Senate Appropriations staff will continue to monitor the Lottery Fund closely
since it appears to be in a situation in which revenue gains are effectively
offset by increases in prize payouts, setting the fund up for long-term fiscal
issues moving forward.
Medical Assistance Snapshot
Based on data from the Department of Human Services (DHS), the Medical
Assistance caseload increased by 331,691 persons during the period of February
2015 to February 2016. The increase occurred, primarily, due to the
implementation of the Affordable Care Act in Pennsylvania. During that same
time, nursing home populations saw a modest decrease while the number of persons
served in the community increased by 5, 893.
Contact Senator Browne:
On the Web:
702 W. Hamilton Street
9 AM to 5 PM
9 AM to 4 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